Analyzing NorthStar Realty Europe Corp. (NRE) and Parkway Properties (PKY)

NorthStar Realty Europe Corp. (NYSE: NRE) and Parkway Properties (NYSE:PKY) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for NorthStar Realty Europe Corp. and Parkway Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NorthStar Realty Europe Corp. 0 0 1 0 3.00
Parkway Properties 0 3 1 0 2.25

NorthStar Realty Europe Corp. currently has a consensus target price of $16.50, suggesting a potential upside of 22.95%. Parkway Properties has a consensus target price of $22.50, suggesting a potential downside of 2.30%. Given NorthStar Realty Europe Corp.’s stronger consensus rating and higher probable upside, research analysts plainly believe NorthStar Realty Europe Corp. is more favorable than Parkway Properties.

Institutional and Insider Ownership

69.9% of NorthStar Realty Europe Corp. shares are owned by institutional investors. Comparatively, 97.1% of Parkway Properties shares are owned by institutional investors. 2.2% of NorthStar Realty Europe Corp. shares are owned by company insiders. Comparatively, 4.9% of Parkway Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares NorthStar Realty Europe Corp. and Parkway Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NorthStar Realty Europe Corp. $131.25 million 5.65 $37.01 million ($0.45) -29.82
Parkway Properties $182.22 million 6.22 $54.29 million N/A N/A

Parkway Properties has higher revenue and earnings than NorthStar Realty Europe Corp..

Risk and Volatility

NorthStar Realty Europe Corp. has a beta of 2.49, meaning that its stock price is 149% more volatile than the S&P 500. Comparatively, Parkway Properties has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Dividends

NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.5%. Parkway Properties pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. NorthStar Realty Europe Corp. pays out -133.3% of its earnings in the form of a dividend.

Profitability

This table compares NorthStar Realty Europe Corp. and Parkway Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NorthStar Realty Europe Corp. -18.57% 7.73% 2.46%
Parkway Properties N/A -4.37% -2.53%

Summary

NorthStar Realty Europe Corp. beats Parkway Properties on 7 of the 13 factors compared between the two stocks.

NorthStar Realty Europe Corp. Company Profile

NorthStar Realty Europe Corp. is a real estate investment trust (REIT). The Company is a European focused commercial real estate company with primary office properties in cities within Germany, the United Kingdom and France. Its objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time. The Company conducts its business through two segments: Real Estate and Corporate. Its European commercial real estate business is primarily focused on office properties. Its portfolio consists of approximately 48 properties and a total of approximately 495,588 square meters of rentable space, located in various European markets, including Frankfurt, Hamburg, Berlin, London, Paris, Amsterdam, Milan, Brussels and Madrid. Its overall portfolio is over 87% occupied. In addition, it owns over two hotels, which are leased to third-party operators. It is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NSAM).

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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