Critical Contrast: Arbor Realty Trust (NYSE:ABR) and Peakstone Realty Trust (NYSE:PKST)

Arbor Realty Trust (NYSE:ABR) and Peakstone Realty Trust (NYSE:PKST) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for Arbor Realty Trust and Peakstone Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arbor Realty Trust	2	2	2	0	2.00
Peakstone Realty Trust	0	1	0	0	2.00

Arbor Realty Trust currently has a consensus target price of $13.83, indicating a potential downside of 7.78%. Peakstone Realty Trust has a consensus target price of $13.00, indicating a potential downside of 13.56%. Given Arbor Realty Trust’s higher possible upside, equities research analysts clearly believe Arbor Realty Trust is more favorable than Peakstone Realty Trust.

Risk and Volatility

Arbor Realty Trust has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500. Comparatively, Peakstone Realty Trust has a beta of 2.63, indicating that its stock price is 163% more volatile than the S&P 500.

Valuation & Earnings

This table compares Arbor Realty Trust and Peakstone Realty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arbor Realty Trust	$683.14 million	4.14	$371.43 million	$1.61	9.32
Peakstone Realty Trust	$239.95 million	2.28	-$550.58 million	($15.55)	-0.97

Arbor Realty Trust has higher revenue and earnings than Peakstone Realty Trust. Peakstone Realty Trust is trading at a lower price-to-earnings ratio than Arbor Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Arbor Realty Trust pays an annual dividend of $1.72 per share and has a dividend yield of 11.5%. Peakstone Realty Trust pays an annual dividend of $0.90 per share and has a dividend yield of 6.0%. Arbor Realty Trust pays out 106.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Peakstone Realty Trust pays out -5.8% of its earnings in the form of a dividend. Arbor Realty Trust has raised its dividend for 12 consecutive years. Arbor Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Arbor Realty Trust and Peakstone Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arbor Realty Trust	24.59%	15.75%	2.68%
Peakstone Realty Trust	-60.76%	-12.06%	-5.25%

Institutional and Insider Ownership

57.3% of Arbor Realty Trust shares are held by institutional investors. Comparatively, 39.0% of Peakstone Realty Trust shares are held by institutional investors. 3.7% of Arbor Realty Trust shares are held by insiders. Comparatively, 0.4% of Peakstone Realty Trust shares are held 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.

Summary

Arbor Realty Trust beats Peakstone Realty Trust on 14 of the 16 factors compared between the two stocks.

About Arbor Realty Trust

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower's equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.

About Peakstone Realty Trust

Peakstone Realty Trust (NYSE: PKST) is an internally managed, real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. These assets are generally leased to creditworthy tenants under long-term net lease agreements with contractual rent escalations. As of March 31, 2023, Peakstone's wholly-owned portfolio consists of 19 million square feet across 24 states in primarily high-growth, strategic coastal and sunbelt markets.