Head to Head Review: Terreno Realty (TRNO) and Kennedy-Wilson (KW)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Terreno Realty 41.73% 5.52% 3.71%
Kennedy-Wilson 19.39% 17.08% 3.33%

Volatility and Risk

Terreno Realty has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Kennedy-Wilson has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Institutional and Insider Ownership

99.6% of Terreno Realty shares are held by institutional investors. Comparatively, 84.9% of Kennedy-Wilson shares are held by institutional investors. 2.4% of Terreno Realty shares are held by insiders. Comparatively, 14.6% of Kennedy-Wilson shares are held 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 & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Terreno Realty $151.65 million 17.71 $63.28 million $1.09 39.61
Kennedy-Wilson $773.50 million 4.00 $150.00 million N/A N/A

Kennedy-Wilson has higher revenue and earnings than Terreno Realty.

Analyst Ratings

This is a summary of current ratings for Terreno Realty and Kennedy-Wilson, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Terreno Realty 0 2 3 0 2.60
Kennedy-Wilson 0 1 4 0 2.80

Terreno Realty currently has a consensus price target of $43.00, indicating a potential downside of 0.42%. Kennedy-Wilson has a consensus price target of $25.70, indicating a potential upside of 18.89%. Given Kennedy-Wilson’s stronger consensus rating and higher probable upside, analysts clearly believe Kennedy-Wilson is more favorable than Terreno Realty.

Dividends

Terreno Realty pays an annual dividend of $0.96 per share and has a dividend yield of 2.2%. Kennedy-Wilson pays an annual dividend of $0.84 per share and has a dividend yield of 3.9%. 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. Terreno Realty has increased its dividend for 6 consecutive years and Kennedy-Wilson has increased its dividend for 8 consecutive years. Kennedy-Wilson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Kennedy-Wilson beats Terreno Realty on 11 of the 16 factors compared between the two stocks.

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.

About Kennedy-Wilson

Kennedy-Wilson Holdings, Inc. operates as a real estate investment company. The company owns, operates, and invests in real estate both on its own and through its investment management platform. It focuses on multifamily and commercial properties located in the Western United States, the United Kingdom, Ireland, Spain, Italy, and Japan. The company owns interest in approximately 53 million square feet of property, including 28,613 multifamily rental units; and 18.9 million square feet of commercial property. It also provides real estate services primarily to financial services clients. In addition, the company is involved in the development, redevelopment, and entitlement of real estate properties; and management of real estate properties for third parties. Kennedy-Wilson Holdings, Inc. was founded in 1977 and is headquartered in Beverly Hills, California.

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