City Office REIT (NYSE: CIO) and Parkway Properties (NYSE:PKY) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Analyst Ratings

This is a summary of current recommendations for City Office REIT and Parkway Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
City Office REIT 0 1 3 0 2.75
Parkway Properties 0 4 1 0 2.20

City Office REIT presently has a consensus target price of $14.83, suggesting a potential upside of 14.45%. Parkway Properties has a consensus target price of $21.60, suggesting a potential downside of 6.05%. Given City Office REIT’s stronger consensus rating and higher possible upside, research analysts plainly believe City Office REIT is more favorable than Parkway Properties.

Valuation & Earnings

This table compares City Office REIT and Parkway Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
City Office REIT $90.65 million 4.33 $47.13 million ($0.13) -99.69
Parkway Properties $182.22 million 6.32 $54.29 million N/A N/A

Parkway Properties has higher revenue and earnings than City Office REIT.

Dividends

City Office REIT pays an annual dividend of $0.94 per share and has a dividend yield of 7.3%. Parkway Properties pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. City Office REIT pays out -723.1% of its earnings in the form of a dividend.

Volatility and Risk

City Office REIT has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Parkway Properties has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Institutional and Insider Ownership

53.0% of City Office REIT shares are held by institutional investors. Comparatively, 97.3% of Parkway Properties shares are held by institutional investors. 3.2% of City Office REIT shares are held by company insiders. Comparatively, 4.9% of Parkway Properties shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares City Office REIT and Parkway Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
City Office REIT 3.70% 1.91% 0.51%
Parkway Properties N/A -4.40% -2.55%

Summary

City Office REIT beats Parkway Properties on 8 of the 14 factors compared between the two stocks.

City Office REIT Company Profile

City Office REIT, Inc. is a real estate investment trust. The Company is focused on acquiring, owning and operating office properties located primarily in metropolitan areas in the Southern and Western United States. It conducts its operations primarily through City Office REIT Operating Partnership, L.P. (the Operating Partnership). As of December 31, 2016, it owned 18 office complexes consisting of 37 office buildings with a total of approximately 4.4 million square feet of net rentable area (NRA) in the metropolitan areas of Boise, Dallas, Denver, Orlando, Phoenix, Portland and Tampa. Its properties include Park Tower, City Center, Intellicenter and Carillon Point in Tampa, Florida; Cherry Creek, Plaza 25, DTC Crossroads, Superior Pointe and Logan Tower in Denver, Colorado; Washington Group Plaza in Boise, Idaho; FRP Collection, Central Fairwinds and FRP Ingenuity Drive in Orlando, Florida; 190 Office Center and Lake Vista Pointe in Dallas, Texas, and SanTan in Phoenix, Arizona.

Parkway Properties Company Profile

Parkway, Inc. is a self-managed real estate investment trust (REIT). The Company owns and operates office properties located in submarkets in Houston, Texas. As of December 31, 2016, the Company’s portfolio consisted of five Class A assets comprising 19 buildings and totaling approximately 8.7 million rentable square feet in the Greenway, Galleria and Westchase submarkets of Houston. In addition, the Company operates a fee-based real estate service (the Third-Party Services Business) through a subsidiary, Eola Office Partners, LLC and its subsidiaries (collectively, Eola), which in total managed approximately 3.8 million square feet (unaudited) for primarily third-party owners, as of December 31, 2016. The Company’s properties include CityWestPlace, San Felipe Plaza, Phoenix Tower, Greenway Plaza and Post Oak Central.

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