PS Business Parks (PSB) vs. Its Peers Critical Analysis
PS Business Parks (NYSE: PSB) is one of 85 public companies in the “Commercial REITs” industry, but how does it weigh in compared to its peers? We will compare PS Business Parks to related companies based on the strength of its institutional ownership, dividends, profitability, valuation, analyst recommendations, earnings and risk.
PS Business Parks pays an annual dividend of $3.40 per share and has a dividend yield of 2.5%. PS Business Parks pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 4.0% and pay out 204.8% of their earnings in the form of a dividend. PS Business Parks has raised its dividend for 3 consecutive years.
Earnings and Valuation
This table compares PS Business Parks and its peers top-line revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|PS Business Parks||$394.93 million||$261.16 million||43.94|
|PS Business Parks Competitors||$482.34 million||$305.34 million||31.73|
PS Business Parks’ peers have higher revenue and earnings than PS Business Parks. PS Business Parks is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.
This table compares PS Business Parks and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|PS Business Parks||39.05%||16.50%||7.61%|
|PS Business Parks Competitors||46.19%||6.04%||3.36%|
Risk and Volatility
PS Business Parks has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, PS Business Parks’ peers have a beta of 0.81, indicating that their average stock price is 19% less volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for PS Business Parks and its peers, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|PS Business Parks||1||1||0||0||1.50|
|PS Business Parks Competitors||749||2733||2253||31||2.27|
PS Business Parks presently has a consensus price target of $107.00, indicating a potential downside of 20.42%. As a group, “Commercial REITs” companies have a potential upside of 7.09%. Given PS Business Parks’ peers stronger consensus rating and higher possible upside, analysts clearly believe PS Business Parks has less favorable growth aspects than its peers.
Insider and Institutional Ownership
72.3% of PS Business Parks shares are owned by institutional investors. Comparatively, 69.1% of shares of all “Commercial REITs” companies are owned by institutional investors. 1.6% of PS Business Parks shares are owned by insiders. Comparatively, 8.5% of shares of all “Commercial REITs” companies are owned by 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.
PS Business Parks peers beat PS Business Parks on 11 of the 15 factors compared.
About PS Business Parks
PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust (REIT). The Company owns, operates and develops commercial properties, primarily multi-tenant flex, office and industrial parks. It focuses on owning concentrated business parks. PS Business Parks, L.P. (the Operating Partnership) is a California limited partnership, which owns directly or indirectly substantially all of its assets and through, which the Company conducts substantially all of its business. PSB is the partner of the Operating Partnership and, as of December 31, 2016, owned 77.9% of the common partnership units. The remaining common partnership units are owned by Public Storage (PS). As of December 31, 2016, the Company owned and operated 28.1 million rentable square feet of commercial space, comprising 99 business parks, in the states, including California, Texas, Virginia, Florida, Maryland and Washington. It also manages 684,000 rentable square feet on behalf of PS.
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