Financial Contrast: Cole Real Estate Investments (COLE) versus Douglas Emmett (DEI)

Cole Real Estate Investments (NYSE: COLE) and Douglas Emmett (NYSE:DEI) are both financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Dividends

Douglas Emmett pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Cole Real Estate Investments does not pay a dividend. Douglas Emmett pays out 192.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings for Cole Real Estate Investments and Douglas Emmett, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cole Real Estate Investments 0 0 0 0 N/A
Douglas Emmett 2 6 2 0 2.00

Douglas Emmett has a consensus target price of $40.86, indicating a potential upside of 6.51%.

Profitability

This table compares Cole Real Estate Investments and Douglas Emmett’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cole Real Estate Investments N/A N/A N/A
Douglas Emmett 13.66% 4.48% 1.42%

Institutional and Insider Ownership

96.4% of Douglas Emmett shares are owned by institutional investors. 17.8% of Douglas Emmett shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Cole Real Estate Investments and Douglas Emmett’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cole Real Estate Investments N/A N/A N/A $0.20 N/A
Douglas Emmett $742.55 million 8.76 $85.39 million $0.52 73.77

Douglas Emmett has higher revenue and earnings than Cole Real Estate Investments. Cole Real Estate Investments is trading at a lower price-to-earnings ratio than Douglas Emmett, indicating that it is currently the more affordable of the two stocks.

Summary

Douglas Emmett beats Cole Real Estate Investments on 10 of the 11 factors compared between the two stocks.

About Cole Real Estate Investments

Cole Real Estate Investments, Inc. is a real estate investment trust (REIT). The Company operates in two segments: Real Estate Investment (REI) and Private Capital Management (PCM). The Company’s REI segment is conducted through Cole REIT III Operating Partnership, LP (CCPT III OP). The Company’s PCM segment is conducted through Cole Capital Advisors, Inc. (CCA). Through its REI segment, the Company acquires and operates a diverse portfolio of core commercial real estate investments primarily consisting of necessity retail properties located throughout the United States, including United States protectorates. The Company’s PCM segment is responsible for managing the Managed REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Managed REITs’ behalf. In February 2014, American Realty Capital Properties Inc purchased Cole Real Estate Investments, Inc.

About Douglas Emmett

Douglas Emmett, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is owner and operator of office and multifamily properties located in submarkets in Los Angeles and Honolulu. The Company operates through two segments: the acquisition, development, ownership and management of office real estate (Office Segment), and the acquisition, development, ownership and management of multifamily real estate (Multifamily Segment). The services for its Office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for its Multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. It focuses on owning, acquiring developing and managing a substantial share of office properties and multifamily communities in neighborhoods.

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