Alexandria Real Estate Equities (ARE) and Orchid Island Capital (ORC) Financial Comparison

Orchid Island Capital (NYSE: ORC) and Alexandria Real Estate Equities (NYSE:ARE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, risk, profitability, analyst recommendations, valuation, earnings and dividends.

Insider and Institutional Ownership

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31.2% of Orchid Island Capital shares are held by institutional investors. Comparatively, 99.0% of Alexandria Real Estate Equities shares are held by institutional investors. 0.3% of Orchid Island Capital shares are held by insiders. Comparatively, 1.4% of Alexandria Real Estate Equities shares are held by 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 Orchid Island Capital and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orchid Island Capital	N/A	13.71%	1.45%
Alexandria Real Estate Equities	22.13%	4.26%	2.18%

Dividends

Orchid Island Capital pays an annual dividend of $1.08 per share and has a dividend yield of 13.4%. Alexandria Real Estate Equities pays an annual dividend of $3.72 per share and has a dividend yield of 3.0%. Orchid Island Capital pays out 128.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities pays out 61.8% of its earnings in the form of a dividend. Alexandria Real Estate Equities has raised its dividend for 7 consecutive years.

Volatility and Risk

Orchid Island Capital has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Valuation and Earnings

This table compares Orchid Island Capital and Alexandria Real Estate Equities’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchid Island Capital	$145.96 million	2.87	$2.00 million	$0.84	9.57
Alexandria Real Estate Equities	$1.13 billion	11.38	$169.09 million	$6.02	20.71

Alexandria Real Estate Equities has higher revenue and earnings than Orchid Island Capital. Orchid Island Capital is trading at a lower price-to-earnings ratio than Alexandria Real Estate Equities, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Orchid Island Capital and Alexandria Real Estate Equities, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchid Island Capital	0	0	0	0	N/A
Alexandria Real Estate Equities	0	1	6	0	2.86

Alexandria Real Estate Equities has a consensus target price of $101.48, suggesting a potential downside of 18.61%. Given Alexandria Real Estate Equities’ higher possible upside, analysts plainly believe Alexandria Real Estate Equities is more favorable than Orchid Island Capital.

Summary

Alexandria Real Estate Equities beats Orchid Island Capital on 14 of the 16 factors compared between the two stocks.

Orchid Island Capital Company Profile

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company's RMBS are backed primarily by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS; and structured Agency RMBS, including collateralized mortgage obligations, interest only securities, inverse interest only securities, and principal only securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2010 and is headquartered in Vero Beach, Florida.

Alexandria Real Estate Equities Company Profile

Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500庐 company, is an urban office real estate investment trust ("REIT") uniquely focused on collaborative life science and technology campuses in AAA innovation cluster locations, with a total market capitalization of $17.9 billion and an asset base in North America of 30.2 million SF as of March 31, 2018. The asset base in North America includes 20.8 million RSF of operating properties and 3.5 million RSF of development and redevelopment of new Class A properties currently undergoing construction and pre-construction activities with target delivery dates ranging from 2018 through 2020. Additionally, the asset base in North America includes 5.9 million SF of intermediate-term and future development projects, including 3.6 million SF of intermediate-term development projects. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle Park. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science and technology campuses that provide its innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science and technology companies through its venture capital arm. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria, please visit www.are.com.