Phillips Edison & Company, Inc. (NASDAQ:PECO) versus Paramount Group (NYSE:PGRE) Financial Analysis

Paramount Group (NYSE:PGRE) and Phillips Edison & Company, Inc. (NASDAQ:PECO) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Paramount Group and Phillips Edison & Company, Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paramount Group	-27.92%	-5.26%	-2.69%
Phillips Edison & Company, Inc.	9.03%	2.22%	1.18%

Volatility & Risk

Paramount Group has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Phillips Edison & Company, Inc. has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Dividends

Paramount Group pays an annual dividend of $0.14 per share and has a dividend yield of 2.9%. Phillips Edison & Company, Inc. pays an annual dividend of $1.23 per share and has a dividend yield of 3.2%. Paramount Group pays out -14.3% of its earnings in the form of a dividend. Phillips Edison & Company, Inc. pays out 267.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Paramount Group and Phillips Edison & Company, Inc.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paramount Group	$742.79 million	1.41	-$259.74 million	($0.98)	-4.92
Phillips Edison & Company, Inc.	$610.12 million	7.84	$56.85 million	$0.46	84.80

Phillips Edison & Company, Inc. has lower revenue, but higher earnings than Paramount Group. Paramount Group is trading at a lower price-to-earnings ratio than Phillips Edison & Company, Inc., indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

65.6% of Paramount Group shares are held by institutional investors. Comparatively, 80.7% of Phillips Edison & Company, Inc. shares are held by institutional investors. 13.5% of Paramount Group shares are held by company insiders. Comparatively, 8.0% of Phillips Edison & Company, Inc. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Paramount Group and Phillips Edison & Company, Inc., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paramount Group	1	2	0	0	1.67
Phillips Edison & Company, Inc.	0	4	3	0	2.43

Paramount Group presently has a consensus price target of $4.50, suggesting a potential downside of 6.64%. Phillips Edison & Company, Inc. has a consensus price target of $38.43, suggesting a potential downside of 1.49%. Given Phillips Edison & Company, Inc.’s stronger consensus rating and higher probable upside, analysts plainly believe Phillips Edison & Company, Inc. is more favorable than Paramount Group.

Summary

Phillips Edison & Company, Inc. beats Paramount Group on 12 of the 16 factors compared between the two stocks.

About Paramount Group

Paramount Group, Inc. (“Paramount” or the “Company”) is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

About Phillips Edison & Company, Inc.

Phillips Edison & Company, Inc. (PECO) is one of the nation's largest owners and operators of omni-channel grocery-anchored shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO's centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO's top grocery anchors include Kroger, Publix, Albertsons and Ahold Delhaize. As of December 31, 2023, PECO managed 301 shopping centers, including 281 wholly-owned centers comprising 32.2 million square feet across 31 states and 20 shopping centers owned in one institutional joint venture. PECO is exclusively focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.