Reviewing Granite Real Estate Inc. Staple (NYSE:GRP.U) and American Assets Trust (NYSE:AAT)

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

Volatility and Risk

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

Dividends

Granite Real Estate Inc. Staple pays an annual dividend of $2.44 per share and has a dividend yield of 4.8%. American Assets Trust pays an annual dividend of $1.34 per share and has a dividend yield of 6.3%. Granite Real Estate Inc. Staple pays out 153.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. American Assets Trust has raised 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.

Profitability

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

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

Valuation and Earnings

This table compares Granite Real Estate Inc. Staple and American Assets Trust’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Real Estate Inc. Staple	$521.25 million	6.15	$101.24 million	$1.59	31.84
American Assets Trust	$441.16 million	2.94	$64.69 million	$0.84	25.34

Granite Real Estate Inc. Staple has higher revenue and 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.

Insider and Institutional Ownership

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Granite Real Estate Inc. Staple and American Assets Trust, as provided by MarketBeat.

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

American Assets Trust has a consensus target price of $22.00, suggesting a potential upside of 3.36%. Given American Assets Trust’s higher probable upside, analysts plainly believe American Assets Trust is more favorable than Granite Real Estate Inc. Staple.

Summary

American Assets Trust beats Granite Real Estate Inc. Staple on 8 of the 15 factors compared between the two stocks.

About Granite Real Estate Inc. Staple

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.

About American Assets Trust

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.