New Residential Investment (NYSE:NRZ) and Liberty Property Trust (NYSE:LPT) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.
Valuation & Earnings
This table compares New Residential Investment and Liberty Property Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|New Residential Investment||$1.52 billion||4.05||$957.53 million||$2.83||6.41|
|Liberty Property Trust||$719.78 million||8.59||$282.34 million||$2.59||16.16|
New Residential Investment has higher revenue and earnings than Liberty Property Trust. New Residential Investment is trading at a lower price-to-earnings ratio than Liberty Property Trust, indicating that it is currently the more affordable of the two stocks.
New Residential Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.0%. Liberty Property Trust pays an annual dividend of $1.60 per share and has a dividend yield of 3.8%. New Residential Investment pays out 70.7% of its earnings in the form of a dividend. Liberty Property Trust pays out 61.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. New Residential Investment has increased its dividend for 4 consecutive years and Liberty Property Trust has increased its dividend for 3 consecutive years. New Residential Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
New Residential Investment has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Liberty Property Trust has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.
Institutional and Insider Ownership
52.4% of New Residential Investment shares are held by institutional investors. Comparatively, 91.2% of Liberty Property Trust shares are held by institutional investors. 4.0% of New Residential Investment shares are held by insiders. Comparatively, 1.2% of Liberty Property Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares New Residential Investment and Liberty Property Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New Residential Investment||83.31%||14.85%||3.53%|
|Liberty Property Trust||46.16%||7.21%||3.55%|
This is a summary of current recommendations and price targets for New Residential Investment and Liberty Property Trust, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New Residential Investment||0||0||4||0||3.00|
|Liberty Property Trust||0||4||2||0||2.33|
New Residential Investment currently has a consensus target price of $19.81, suggesting a potential upside of 9.28%. Liberty Property Trust has a consensus target price of $44.20, suggesting a potential upside of 5.62%. Given New Residential Investment’s stronger consensus rating and higher possible upside, research analysts clearly believe New Residential Investment is more favorable than Liberty Property Trust.
New Residential Investment beats Liberty Property Trust on 12 of the 17 factors compared between the two stocks.
New Residential Investment Company Profile
New Residential Investment Corp., a real estate investment trust, focuses on investing in and managing residential mortgage related assets in the United States. It operates through Servicing Related Assets, Residential Securities and Loans, and Other Investments segments. The company invests in excess mortgage servicing rights (MSRs) on residential mortgage loans; and in servicer advances, including the basic fee component of the related MSRs. It also invests in real estate securities, residential mortgage loans, investments in consumer loans, and corporate. In addition, the company has an interest in a portfolio of consumer loans, including unsecured and homeowner loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2011 and is based in New York, New York.
Liberty Property Trust Company Profile
Liberty Property Trust (NYSE:LPT) is a leader in commercial real estate, serving customers in the United States and United Kingdom, through the development, acquisition, ownership and management of superior industrial and office properties. Liberty's 103 million square foot operating portfolio provides productive work environments for 1,200 tenants.
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