Critical Survey: Essex Property Trust (NYSE:ESS) & TPG RE Finance Trust (NYSE:TRTX)

TPG RE Finance Trust (NYSE:TRTX) and Essex Property Trust (NYSE:ESS) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.

Dividends

TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 11.5%. Essex Property Trust pays an annual dividend of $9.80 per share and has a dividend yield of 3.5%. TPG RE Finance Trust pays out 139.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Essex Property Trust pays out 114.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Essex Property Trust has raised its dividend for 30 consecutive years.

Valuation & Earnings

This table compares TPG RE Finance Trust and Essex Property Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TPG RE Finance Trust	$390.25 million	1.73	-$116.63 million	$0.69	12.09
Essex Property Trust	$1.67 billion	10.66	$405.83 million	$8.56	32.35

Essex Property Trust has higher revenue and earnings than TPG RE Finance Trust. TPG RE Finance Trust is trading at a lower price-to-earnings ratio than Essex Property Trust, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

TPG RE Finance Trust has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500. Comparatively, Essex Property Trust has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for TPG RE Finance Trust and Essex Property Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TPG RE Finance Trust	1	0	5	0	2.67
Essex Property Trust	1	12	7	0	2.30

TPG RE Finance Trust currently has a consensus target price of $8.92, indicating a potential upside of 6.85%. Essex Property Trust has a consensus target price of $304.32, indicating a potential upside of 9.89%. Given Essex Property Trust’s higher probable upside, analysts plainly believe Essex Property Trust is more favorable than TPG RE Finance Trust.

Profitability

This table compares TPG RE Finance Trust and Essex Property Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TPG RE Finance Trust	19.65%	-7.50%	-2.19%
Essex Property Trust	31.55%	9.72%	4.36%

Institutional and Insider Ownership

57.1% of TPG RE Finance Trust shares are held by institutional investors. Comparatively, 96.5% of Essex Property Trust shares are held by institutional investors. 2.5% of TPG RE Finance Trust shares are held by company insiders. Comparatively, 3.8% of Essex Property Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Essex Property Trust beats TPG RE Finance Trust on 14 of the 17 factors compared between the two stocks.

About TPG RE Finance Trust

TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. 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. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.

About Essex Property Trust

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 252 apartment communities comprising approximately 62,000 apartment homes with an additional property in active development.