Equity Commonwealth (NYSE:EQC) and Eastgroup Properties (NYSE:EGP) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Dividends

Eastgroup Properties pays an annual dividend of $2.88 per share and has a dividend yield of 2.5%. Equity Commonwealth does not pay a dividend. Eastgroup Properties pays out 61.7% of its earnings in the form of a dividend. Eastgroup Properties has increased its dividend for 7 consecutive years.

Risk & Volatility

Equity Commonwealth has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500. Comparatively, Eastgroup Properties has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Insider and Institutional Ownership

96.8% of Equity Commonwealth shares are owned by institutional investors. Comparatively, 94.1% of Eastgroup Properties shares are owned by institutional investors. 1.6% of Equity Commonwealth shares are owned by insiders. Comparatively, 2.0% of Eastgroup Properties shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Equity Commonwealth and Eastgroup Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Commonwealth 164.13% 9.31% 7.97%
Eastgroup Properties 26.82% 9.19% 3.86%

Valuation & Earnings

This table compares Equity Commonwealth and Eastgroup Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity Commonwealth $197.02 million 19.87 $272.81 million $0.69 46.54
Eastgroup Properties $300.39 million 13.88 $88.50 million $4.67 24.29

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

Analyst Recommendations

This is a summary of current recommendations for Equity Commonwealth and Eastgroup Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Commonwealth 0 2 0 0 2.00
Eastgroup Properties 0 6 3 0 2.33

Equity Commonwealth presently has a consensus target price of $33.00, suggesting a potential upside of 2.77%. Eastgroup Properties has a consensus target price of $98.91, suggesting a potential downside of 12.81%. Given Equity Commonwealth’s higher probable upside, research analysts clearly believe Equity Commonwealth is more favorable than Eastgroup Properties.

Summary

Equity Commonwealth beats Eastgroup Properties on 9 of the 17 factors compared between the two stocks.

About Equity Commonwealth

Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. As of December 31, 2018, EQC's portfolio comprised 10 properties and 5.1 million square feet.

About Eastgroup Properties

EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 50,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 41.7 million square feet.

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