Critical Comparison: Sun Communities (NYSE:SUI) & Paramount Group (NYSE:PGRE)

Paramount Group (NYSE:PGRE) and Sun Communities (NYSE:SUI) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Valuation and Earnings

This table compares Paramount Group and Sun Communities’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paramount Group	$742.79 million	1.37	-$259.74 million	($1.20)	-3.91
Sun Communities	$3.22 billion	4.96	-$201.00 million	$1.14	112.82

Sun Communities has higher revenue and earnings than Paramount Group. Paramount Group is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Paramount Group has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Paramount Group and Sun Communities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paramount Group	2	2	1	0	1.80
Sun Communities	0	5	5	0	2.50

Paramount Group presently has a consensus price target of $4.60, suggesting a potential downside of 1.92%. Sun Communities has a consensus price target of $141.17, suggesting a potential upside of 9.76%. Given Sun Communities’ stronger consensus rating and higher probable upside, analysts plainly believe Sun Communities is more favorable than Paramount Group.

Profitability

This table compares Paramount Group and Sun Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paramount Group	-34.97%	-6.07%	-3.13%
Sun Communities	4.40%	1.79%	0.82%

Dividends

Paramount Group pays an annual dividend of $0.14 per share and has a dividend yield of 3.0%. Sun Communities pays an annual dividend of $3.76 per share and has a dividend yield of 2.9%. Paramount Group pays out -11.7% of its earnings in the form of a dividend. Sun Communities pays out 329.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities has increased its dividend for 8 consecutive years. Paramount Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

65.6% of Paramount Group shares are held by institutional investors. Comparatively, 99.6% of Sun Communities shares are held by institutional investors. 10.4% of Paramount Group shares are held by insiders. Comparatively, 2.1% of Sun Communities shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Sun Communities beats Paramount Group on 13 of the 17 factors compared between the two stocks.

About Paramount Group

Paramount Group, Inc. ("Paramount" or the "Company") is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.