Critical Comparison: Duke Realty (DRE) and Western Asset Mortgage Capit (WMC)

Duke Realty (NYSE: DRE) and Western Asset Mortgage Capit (NYSE:WMC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Analyst Recommendations

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This is a summary of current recommendations and price targets for Duke Realty and Western Asset Mortgage Capit, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Duke Realty 0 7 4 0 2.36
Western Asset Mortgage Capit 0 1 0 0 2.00

Duke Realty presently has a consensus price target of $29.60, indicating a potential upside of 11.78%. Given Duke Realty’s stronger consensus rating and higher probable upside, equities analysts clearly believe Duke Realty is more favorable than Western Asset Mortgage Capit.

Volatility and Risk

Duke Realty has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Western Asset Mortgage Capit has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Valuation & Earnings

This table compares Duke Realty and Western Asset Mortgage Capit’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Duke Realty $780.93 million 12.10 $1.63 billion $1.24 21.35
Western Asset Mortgage Capit $154.74 million 2.63 $85.10 million $1.15 8.43

Duke Realty has higher revenue and earnings than Western Asset Mortgage Capit. Western Asset Mortgage Capit is trading at a lower price-to-earnings ratio than Duke Realty, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

94.1% of Duke Realty shares are owned by institutional investors. Comparatively, 43.1% of Western Asset Mortgage Capit shares are owned by institutional investors. 0.2% of Duke Realty shares are owned by company insiders. Comparatively, 0.4% of Western Asset Mortgage Capit shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Duke Realty and Western Asset Mortgage Capit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Duke Realty 197.59% 6.28% 3.80%
Western Asset Mortgage Capit 54.99% 13.24% 1.68%

Dividends

Duke Realty pays an annual dividend of $0.80 per share and has a dividend yield of 3.0%. Western Asset Mortgage Capit pays an annual dividend of $1.24 per share and has a dividend yield of 12.8%. Duke Realty pays out 64.5% of its earnings in the form of a dividend. Western Asset Mortgage Capit pays out 107.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Duke Realty has increased its dividend for 3 consecutive years.

Summary

Duke Realty beats Western Asset Mortgage Capit on 14 of the 17 factors compared between the two stocks.

Duke Realty Company Profile

Duke Realty Corporation is a self-managed real estate investment trust (REIT). The Company and Duke Realty Limited Partnership collectively specialize in the ownership, management and development of bulk distribution (industrial) and medical office real estate. It operates through three segments, the first two of which consist of the ownership and rental of industrial and medical office real estate investments. The operations of its industrial and medical office properties, as well as its rental operations, are collectively referred to as Rental Operations. The third segment includes real estate services, such as property management, asset management, leasing, development, general contracting and construction management. Its Service Operations segment also includes its taxable REIT subsidiary, through which certain of the segment’s operations are conducted. It maintains a Baa1 rating from Moody’s Investor Service, Inc. and a BBB+ rating from Standard & Poor’s Financial Services LLC.

Western Asset Mortgage Capit Company Profile

Western Asset Mortgage Capital Corporation operates as a real estate investment trust in the United States. It primarily focuses on investing in, financing, and managing a portfolio of agency and non-agency residential mortgage-backed securities and commercial mortgage-backed securities, residential whole-loans, and other financial assets. 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 2009 and is based in Pasadena, California.

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