Contrasting Boston Properties (NYSE:BXP) & Starwood Property Trust (NYSE:STWD)

Starwood Property Trust (NYSE:STWDGet Free Report) and Boston Properties (NYSE:BXPGet Free Report) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Insider and Institutional Ownership

49.6% of Starwood Property Trust shares are owned by institutional investors. Comparatively, 94.6% of Boston Properties shares are owned by institutional investors. 5.4% of Starwood Property Trust shares are owned by insiders. Comparatively, 1.1% of Boston Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Starwood Property Trust and Boston Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starwood Property Trust 0 2 1 0 2.33
Boston Properties 1 11 5 0 2.24

Starwood Property Trust currently has a consensus price target of $21.50, indicating a potential upside of 8.70%. Boston Properties has a consensus price target of $69.56, indicating a potential upside of 11.03%. Given Boston Properties’ higher probable upside, analysts plainly believe Boston Properties is more favorable than Starwood Property Trust.

Volatility and Risk

Starwood Property Trust has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500. Comparatively, Boston Properties has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Starwood Property Trust and Boston Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Starwood Property Trust 20.60% 8.82% 0.80%
Boston Properties 5.81% 2.32% 0.76%

Earnings and Valuation

This table compares Starwood Property Trust and Boston Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Starwood Property Trust $1.46 billion 4.22 $871.47 million $1.29 15.31
Boston Properties $3.27 billion 3.00 $190.21 million $1.21 51.78

Starwood Property Trust has higher earnings, but lower revenue than Boston Properties. Starwood Property Trust is trading at a lower price-to-earnings ratio than Boston Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 9.7%. Boston Properties pays an annual dividend of $3.92 per share and has a dividend yield of 6.3%. Starwood Property Trust pays out 148.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Boston Properties pays out 324.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Starwood Property Trust beats Boston Properties on 11 of the 16 factors compared between the two stocks.

About Starwood Property Trust

(Get Free Report)

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through four segments: Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was incorporated in 2009 and is headquartered in Greenwich, Connecticut.

About Boston Properties

(Get Free Report)

BXP (NYSE: BXP) is the largest publicly traded developer, owner, and manager of premier workplaces in the United States, concentrated in six dynamic gateway markets – Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. BXP has delivered places that power progress for our clients and communities for more than 50 years. BXP is a fully integrated real estate company, organized as a real estate investment trust (REIT). Including properties owned by unconsolidated joint ventures, BXP's portfolio totals 53.5 million square feet and 190 properties, including 11 properties under construction/redevelopment.

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