Head-To-Head Comparison: Kilroy Realty (NYSE:KRC) vs. City Office REIT (NYSE:CIO)

Kilroy Realty (NYSE:KRC) and City Office REIT (NYSE:CIO) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Valuation and Earnings

This table compares Kilroy Realty and City Office REIT’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kilroy Realty $747.30 million 11.45 $258.41 million $3.48 23.20
City Office REIT $129.48 million 5.65 $38.17 million $1.08 12.42

Kilroy Realty has higher revenue and earnings than City Office REIT. City Office REIT is trading at a lower price-to-earnings ratio than Kilroy Realty, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Kilroy Realty has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, City Office REIT has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Kilroy Realty and City Office REIT, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kilroy Realty 0 2 6 0 2.75
City Office REIT 0 1 4 0 2.80

Kilroy Realty presently has a consensus price target of $82.50, indicating a potential upside of 2.18%. City Office REIT has a consensus price target of $14.00, indicating a potential upside of 4.40%. Given City Office REIT’s stronger consensus rating and higher possible upside, analysts plainly believe City Office REIT is more favorable than Kilroy Realty.

Profitability

This table compares Kilroy Realty and City Office REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kilroy Realty 35.04% 6.62% 3.50%
City Office REIT -5.18% -2.66% -0.68%

Institutional and Insider Ownership

96.7% of Kilroy Realty shares are held by institutional investors. Comparatively, 67.6% of City Office REIT shares are held by institutional investors. 2.3% of Kilroy Realty shares are held by insiders. Comparatively, 3.0% of City Office REIT shares are held 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.

Dividends

Kilroy Realty pays an annual dividend of $1.94 per share and has a dividend yield of 2.4%. City Office REIT pays an annual dividend of $0.94 per share and has a dividend yield of 7.0%. Kilroy Realty pays out 55.7% of its earnings in the form of a dividend. City Office REIT pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kilroy Realty has raised its dividend for 3 consecutive years.

Summary

Kilroy Realty beats City Office REIT on 13 of the 17 factors compared between the two stocks.

Kilroy Realty Company Profile

Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the West Coast's premier landlords. The company has over 70 years of experience developing, acquiring and managing office and mixed-use real estate assets. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies. At December 31, 2018, the company's stabilized portfolio totaled approximately 13.2 million square feet of office space located in the coastal regions of Los Angeles, Orange County, San Diego, the San Francisco Bay Area and Greater Seattle and 200 residential units located in the Hollywood submarket of Los Angeles. The stabilized portfolio was 94.4% occupied and 96.6% leased. In addition, KRC had three projects under construction totaling approximately 1.3 million square feet of office space that was 37% leased, 801 residential units and 96,000 square feet of retail space that was 91% leased, as well as two projects in the tenant improvement phase totaling approximately 1.2 million square feet of office and PDR space. The office components of the two projects are fully leased to Adobe and Dropbox. The company's commitment and leadership position in sustainability has been recognized by various industry groups across the world. In September 2018, the company was recognized by GRESB both as North American leader across all asset classes and a global leader among all publicly traded real estate companies. Other sustainability accolades include NAREIT's Leader in the Light award for the past five years, the EPA's highest honor of Sustained Excellence and winner of Energy Star Partner of the Year for the past five years. The company is listed in the Dow Jones Sustainability World Index. At the end of the fourth quarter, the company's stabilized portfolio was 63% LEED certified and 79% of eligible properties were ENERGY STAR certified.

City Office REIT Company Profile

City Office REIT, Inc. (NYSE: CIO) invests in high-quality office properties in 18-hour cities with strong economic fundamentals, primarily in the Southern and Western United States. At December 31, 2018, CIO owned office complexes comprising 5.7 million square feet of net rentable area (“NRA”).

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