Critical Contrast: Paramount Group (NYSE:PGRE) & Apartment Income REIT (NYSE:AIRC)

Paramount Group (NYSE:PGRE) and Apartment Income REIT (NYSE:AIRC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Valuation & Earnings

This table compares Paramount Group and Apartment Income REIT’s 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	1.34	-$259.74 million	($1.20)	-3.82
Apartment Income REIT	$820.04 million	6.77	$635.10 million	$4.23	9.06

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

Institutional and Insider Ownership

65.6% of Paramount Group shares are owned by institutional investors. Comparatively, 98.1% of Apartment Income REIT shares are owned by institutional investors. 13.5% of Paramount Group shares are owned by company insiders. Comparatively, 1.0% of Apartment Income REIT shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Paramount Group and Apartment Income REIT’s 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%
Apartment Income REIT	77.37%	26.29%	9.95%

Risk & Volatility

Paramount Group has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Apartment Income REIT has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Paramount Group and Apartment Income REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paramount Group	2	2	1	0	1.80
Apartment Income REIT	0	8	1	0	2.11

Paramount Group presently has a consensus target price of $4.60, suggesting a potential upside of 0.22%. Apartment Income REIT has a consensus target price of $36.59, suggesting a potential downside of 4.52%. Given Paramount Group’s higher possible upside, analysts plainly believe Paramount Group is more favorable than Apartment Income REIT.

Dividends

Paramount Group pays an annual dividend of $0.14 per share and has a dividend yield of 3.1%. Apartment Income REIT pays an annual dividend of $1.80 per share and has a dividend yield of 4.7%. Paramount Group pays out -11.7% of its earnings in the form of a dividend. Apartment Income REIT pays out 42.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Apartment Income REIT beats Paramount Group on 11 of the 15 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 Apartment Income REIT

Apartment Income REIT Corp (NYSE: AIRC) is a publicly traded, self-administered real estate investment trust (REIT). AIR's portfolio comprises 76 communities totaling 27,010 apartment homes located in 10 states and the District of Columbia. AIR offers a simple, predictable business model with focus on what we call the AIR Edge, the cumulative result of our focus on resident selection, satisfaction, and retention, as well as relentless innovation in delivering best-in-class property management. The AIR Edge is a durable operating advantage in driving organic growth, as well as making possible the opportunity for excess returns for properties new to AIR's platform.