Head-To-Head Analysis: Terreno Realty (TRNO) & FirstService (FSV)

FirstService (NASDAQ:FSV) and Terreno Realty (NYSE:TRNO) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Earnings & Valuation

This table compares FirstService and Terreno Realty’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FirstService $1.71 billion 1.55 $53.07 million $2.03 37.57
Terreno Realty $132.48 million 17.32 $53.09 million $1.09 35.59

Terreno Realty has lower revenue, but higher earnings than FirstService. Terreno Realty is trading at a lower price-to-earnings ratio than FirstService, indicating that it is currently the more affordable of the two stocks.

Dividends

FirstService pays an annual dividend of $0.54 per share and has a dividend yield of 0.7%. Terreno Realty pays an annual dividend of $0.96 per share and has a dividend yield of 2.5%. FirstService pays out 26.6% of its earnings in the form of a dividend. Terreno Realty pays out 88.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FirstService has increased its dividend for 2 consecutive years and Terreno Realty has increased its dividend for 5 consecutive years. Terreno Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

67.4% of FirstService shares are owned by institutional investors. Comparatively, 99.9% of Terreno Realty shares are owned by institutional investors. 2.6% of Terreno Realty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

FirstService has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Terreno Realty has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.

Profitability

This table compares FirstService and Terreno Realty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FirstService 3.71% 36.30% 8.32%
Terreno Realty 34.83% 4.68% 3.10%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for FirstService and Terreno Realty, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FirstService 0 4 0 0 2.00
Terreno Realty 0 4 6 0 2.60

FirstService currently has a consensus target price of $84.67, indicating a potential upside of 11.01%. Terreno Realty has a consensus target price of $39.14, indicating a potential upside of 0.91%. Given FirstService’s higher probable upside, research analysts plainly believe FirstService is more favorable than Terreno Realty.

Summary

Terreno Realty beats FirstService on 9 of the 17 factors compared between the two stocks.

About FirstService

FirstService Corporation provides property services to residential and commercial customers in the United States and Canada. The company operates through two segments, FirstService Residential and FirstService Brands. The FirstService Residential segment manages private residential communities, such as condominiums, co-operatives, homeowner associations, master-planned communities, active adult and lifestyle communities, and various other residential developments. This segment also offers a range of ancillary services, including on-site staffing for building engineering and maintenance, full-service swimming pool and amenity management, security and concierge/front desk, and landscaping; and financial services comprising cash management, other banking transaction-related services, and specialized property insurance brokerage. In addition, this segment provides energy management solutions and advisory services, and resale processing services. The FirstService Brands segment offers property services through 6 franchise networks; and company-owned locations, including 17 California Closets locations and 8 Paul Davis Restoration locations. It offers residential and commercial restoration, painting, and floor coverings design and installation services; custom-designed and installed closet, and home storage solutions; home inspection services; exterior residential painting and window cleaning services; fire protection services; and heating, ventilation, and air conditioning services, as well as related services. This segment provides its services primarily under the Paul Davis Restoration, CertaPro Painters, California Closets, Pillar to Post Home Inspectors, Floor Coverings International, College Pro Painters, Century Fire Protection, and Service America brand names. FirstService Corporation was founded in 1988 and is headquartered in Toronto, Canada.

About Terreno Realty

Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

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