TIER REIT (TIER) and Equity Commonwealth (NYSE:EQC) Critical Analysis

TIER REIT (OTCMKTS: TIER) and Equity Commonwealth (NYSE:EQC) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for TIER REIT and Equity Commonwealth, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TIER REIT 0 0 2 0 3.00
Equity Commonwealth 0 3 1 0 2.25

TIER REIT presently has a consensus target price of $20.50, indicating a potential upside of 14.59%. Equity Commonwealth has a consensus target price of $32.00, indicating a potential upside of 5.09%. Given TIER REIT’s stronger consensus rating and higher probable upside, research analysts clearly believe TIER REIT is more favorable than Equity Commonwealth.

Profitability

This table compares TIER REIT and Equity Commonwealth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TIER REIT 174.73% 59.24% 25.37%
Equity Commonwealth 28.50% 3.69% 2.52%

Insider and Institutional Ownership

93.2% of Equity Commonwealth shares are held by institutional investors. 1.0% of Equity Commonwealth shares are held by company 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.

Valuation & Earnings

This table compares TIER REIT and Equity Commonwealth’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TIER REIT $220.99 million 3.87 $99.25 million N/A N/A
Equity Commonwealth $409.33 million 9.23 $194.30 million $0.86 35.41

Equity Commonwealth has higher revenue and earnings than TIER REIT.

TIER REIT Company Profile

TIER REIT, Inc. is a real estate investment trust. The Company’s business consists of owning, acquiring, developing, operating, investing in, and disposing of real estate assets. The Company’s business is conducted through Tier Operating Partnership LP (Tier OP). As of December 31, 2016, the Company owned interests in 29 operating office properties, one non-operating property and one development property located in 13 markets throughout the United States. It owns properties located in metropolitan cities and suburban markets in the United States. The Company’s office properties include The Terrace Office Park, Domain 3, Domain 4, 5950 Sherry Lane, Burnett Plaza, Loop Central, One BriarLake Plaza, Three Eldridge Place, Eisenhower I, Forum Office Park, 500 E. Pratt, Woodcrest Corporate Center and 111 Woodcrest. The Company’s properties are located in Austin, Dallas, Houston, Charlotte, Nashville, Atlanta and Denver.

Equity Commonwealth Company Profile

Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of December 31, 2016, the Company’s portfolio included 33 properties, one land parcel and one property taken out of a service, classified as a land parcel, with a combined 16.1 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.

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