American Assets Trust (NYSE:AAT) vs. Granite Real Estate Inc. Staple (NYSE:GRP.U) Critical Review

American Assets Trust (NYSE:AATGet Free Report) and Granite Real Estate Inc. Staple (NYSE:GRP.UGet Free Report) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Volatility and Risk

American Assets Trust has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Granite Real Estate Inc. Staple has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares American Assets Trust and Granite Real Estate Inc. Staple’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Assets Trust 11.42% 4.31% 1.68%
Granite Real Estate Inc. Staple 26.28% 2.54% 1.49%

Analyst Ratings

This is a summary of recent recommendations for American Assets Trust and Granite Real Estate Inc. Staple, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Assets Trust 0 1 0 0 2.00
Granite Real Estate Inc. Staple 0 0 0 0 N/A

American Assets Trust presently has a consensus target price of $22.00, suggesting a potential upside of 4.81%. Given American Assets Trust’s higher probable upside, equities research analysts clearly believe American Assets Trust is more favorable than Granite Real Estate Inc. Staple.

Earnings and Valuation

This table compares American Assets Trust and Granite Real Estate Inc. Staple’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Assets Trust $441.16 million 2.90 $64.69 million $0.84 24.99
Granite Real Estate Inc. Staple $386.07 million 8.30 $101.24 million $1.59 31.84

Granite Real Estate Inc. Staple has lower revenue, but higher earnings than American Assets Trust. American Assets Trust is trading at a lower price-to-earnings ratio than Granite Real Estate Inc. Staple, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

90.4% of American Assets Trust shares are held by institutional investors. Comparatively, 57.1% of Granite Real Estate Inc. Staple shares are held by institutional investors. 37.3% of American Assets Trust shares are held by insiders. Comparatively, 0.3% of Granite Real Estate Inc. Staple shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

American Assets Trust pays an annual dividend of $1.34 per share and has a dividend yield of 6.4%. Granite Real Estate Inc. Staple pays an annual dividend of $2.43 per share and has a dividend yield of 4.8%. American Assets Trust pays out 159.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Real Estate Inc. Staple pays out 152.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Assets Trust has increased its dividend for 4 consecutive years. American Assets Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

American Assets Trust beats Granite Real Estate Inc. Staple on 9 of the 15 factors compared between the two stocks.

About American Assets Trust

(Get Free Report)

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.

About Granite Real Estate Inc. Staple

(Get Free Report)

Granite Real Estate Investment Trust is engaged in the ownership and management of predominantly industrial properties in Canada, the United States, Mexico and Europe. The Company owns and manages rental income properties. Its services include sourcing and real estate acquisition, site development, assisting with government approvals and re-zoning to specific uses, build-to-suit construction, property renovation, project management and long-term leasing. Granite Real Estate Investment Trust, formerly known as Granite Real Estate Inc., is based in Toronto, Canada.

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