Critical Review: Equity Commonwealth (NYSE:EQC) & American Tower (NYSE:AMT)

American Tower (NYSE:AMT) and Equity Commonwealth (NYSE:EQC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for American Tower and Equity Commonwealth, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Tower 1 5 11 0 2.59
Equity Commonwealth 1 0 0 0 1.00

American Tower currently has a consensus price target of $298.07, suggesting a potential upside of 18.93%. Equity Commonwealth has a consensus price target of $28.00, suggesting a potential upside of 4.59%. Given American Tower’s stronger consensus rating and higher possible upside, research analysts plainly believe American Tower is more favorable than Equity Commonwealth.

Institutional and Insider Ownership

89.4% of American Tower shares are owned by institutional investors. Comparatively, 94.6% of Equity Commonwealth shares are owned by institutional investors. 0.7% of American Tower shares are owned by insiders. Comparatively, 1.6% of Equity Commonwealth shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares American Tower and Equity Commonwealth’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Tower $8.04 billion 14.19 $1.69 billion $5.50 45.57
Equity Commonwealth $66.28 million 48.83 $451.29 million ($0.20) -133.84

American Tower has higher revenue and earnings than Equity Commonwealth. Equity Commonwealth is trading at a lower price-to-earnings ratio than American Tower, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

American Tower has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500. Comparatively, Equity Commonwealth has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
American Tower 27.44% 39.34% 4.64%
Equity Commonwealth -28.17% -0.53% -0.50%

Summary

American Tower beats Equity Commonwealth on 11 of the 14 factors compared between the two stocks.

About American Tower

American Tower Corp. provides real estate investment services, and owns, operates, and develops multitenant communications real estate properties. It operates through the following segments: U.S. & Canada, Asia-Pacific, Europe, Africa Latin America, and Services. The Asia-Pacific segment refers to the operations in Australia and India. The Europe segment consists of France, Germany and Poland. The Africa segment comprises of Burkina Faso, Ghana, Kenya, Niger, Nigeria, South Africa and Uganda. The Latin America segment includes operations in Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay and Peru. The Services segment offers tower-related services in the United States, including site acquisition, zoning & permitting services and structural analysis services. The company was founded in 1995 and is headquartered in Boston, MA.

About Equity Commonwealth

Equity Commonwealth operates as an internally managed and self-advised real estate investment trust. It engages in the ownership and operation of office properties. The company was founded by Barry M. Portnoy on October 9, 1986 and is headquartered in Chicago, IL.

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