Brookfield Canada Office Properties (NYSE: BOXC) and Vereit (NYSE:VER) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Earnings and Valuation

This table compares Brookfield Canada Office Properties and Vereit’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brookfield Canada Office Properties N/A N/A N/A $1.16 21.52
Vereit $1.45 billion 4.94 -$195.86 million ($0.13) -56.77

Brookfield Canada Office Properties has higher earnings, but lower revenue than Vereit. Vereit is trading at a lower price-to-earnings ratio than Brookfield Canada Office Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

Brookfield Canada Office Properties pays an annual dividend of $0.97 per share and has a dividend yield of 3.9%. Vereit pays an annual dividend of $0.55 per share and has a dividend yield of 7.5%. Brookfield Canada Office Properties pays out 83.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vereit pays out -423.1% of its earnings in the form of a dividend. Vereit is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Brookfield Canada Office Properties and Vereit, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brookfield Canada Office Properties 0 1 0 0 2.00
Vereit 0 1 2 0 2.67

Vereit has a consensus target price of $9.50, indicating a potential upside of 28.73%. Given Vereit’s stronger consensus rating and higher possible upside, analysts clearly believe Vereit is more favorable than Brookfield Canada Office Properties.

Profitability

This table compares Brookfield Canada Office Properties and Vereit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brookfield Canada Office Properties 7.64% 1.26% 0.65%
Vereit -3.76% -0.61% -0.34%

Insider and Institutional Ownership

20.1% of Brookfield Canada Office Properties shares are owned by institutional investors. Comparatively, 85.2% of Vereit shares are owned by institutional investors. 0.1% of Vereit shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Brookfield Canada Office Properties has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Vereit has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Summary

Vereit beats Brookfield Canada Office Properties on 8 of the 14 factors compared between the two stocks.

Brookfield Canada Office Properties Company Profile

Brookfield Canada Office Properties is a Canada-based real estate investment trust (REIT). The Company invests, develops and operates commercial office properties in Toronto, Ottawa, Calgary and Vancouver. The Company’s commercial-property portfolio consists of interests in approximately 25 properties totaling approximately 21.1 million square feet, including approximately 4.0 million square feet of parking and other. The Company’s development portfolio consists of the Brookfield Place Calgary East development site totaling approximately 1.4 million square feet in Calgary. The Company also invests in ongoing maintenance and capital improvement projects. The Company focuses on the markets, which include financial, government and energy sectors, which are primarily located in the cities of Toronto and Calgary. Its properties include 2 Queen Street East, Queen’s Quay Terminal, Exchange Tower, Bankers Hall Retail, Suncor Energy Centre, Jean Edmonds Tower and Royal Centre.

Vereit Company Profile

VEREIT, Inc. is a full-service real estate operating company. The Company owns and manages a diversified portfolio of retail, restaurant, office and industrial real estate assets. It operates through two segments: real estate investment (REI) segment and its investment management segment, Cole Capital. The Company manages real estate investments on behalf of the Cole Capital. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include publicly registered, non-traded real estate investment trusts (REITs). The Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (CCA), which is a subsidiary of the Operating Partnership. The Company’s portfolio consists of Industrial distribution, shopping centers and single-tenant retail. The Company serves in various industries, such as casual dining restaurants, manufacturing, quick service restaurants, grocery and super market, home and garden retail and logistics.

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