Reviewing Douglas Emmett (NYSE:DEI) & Orion Office REIT (NYSE:ONL)

Orion Office REIT (NYSE:ONL) and Douglas Emmett (NYSE:DEI) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Institutional and Insider Ownership

80.0% of Orion Office REIT shares are held by institutional investors. Comparatively, 97.4% of Douglas Emmett shares are held by institutional investors. 0.4% of Orion Office REIT shares are held by company insiders. Comparatively, 14.7% of Douglas Emmett shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Orion Office REIT pays an annual dividend of $0.40 per share and has a dividend yield of 9.6%. Douglas Emmett pays an annual dividend of $0.76 per share and has a dividend yield of 3.9%. Orion Office REIT pays out -26.0% of its earnings in the form of a dividend. Douglas Emmett pays out -760.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Orion Office REIT and Douglas Emmett’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orion Office REIT	-50.76%	-10.28%	-6.26%
Douglas Emmett	-1.68%	-0.43%	-0.17%

Volatility & Risk

Orion Office REIT has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Valuation and Earnings

This table compares Orion Office REIT and Douglas Emmett”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion Office REIT	$195.04 million	1.19	-$57.30 million	($1.54)	-2.70
Douglas Emmett	$1.02 billion	3.21	-$42.71 million	($0.10)	-195.45

Douglas Emmett has higher revenue and earnings than Orion Office REIT. Douglas Emmett is trading at a lower price-to-earnings ratio than Orion Office REIT, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Orion Office REIT and Douglas Emmett, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion Office REIT	0	1	0	0	2.00
Douglas Emmett	0	5	2	0	2.29

Douglas Emmett has a consensus target price of $17.43, indicating a potential downside of 10.83%. Given Douglas Emmett’s stronger consensus rating and higher probable upside, analysts clearly believe Douglas Emmett is more favorable than Orion Office REIT.

Summary

Douglas Emmett beats Orion Office REIT on 14 of the 16 factors compared between the two stocks.

About Orion Office REIT

Orion Office REIT specializes in the ownership, acquisition and management of a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S. The portfolio is leased primarily on a single-tenant net lease basis to creditworthy tenants. The company's team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.

About Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.