Head to Head Review: Kilroy Realty (NYSE:KRC) & Paramount Group (NYSE:PGRE)

Kilroy Realty (NYSE:KRC) and Paramount Group (NYSE:PGRE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Institutional and Insider Ownership

94.2% of Kilroy Realty shares are owned by institutional investors. Comparatively, 65.6% of Paramount Group shares are owned by institutional investors. 2.5% of Kilroy Realty shares are owned by company insiders. Comparatively, 13.5% of Paramount Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Kilroy Realty and Paramount Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kilroy Realty	18.43%	3.63%	1.81%
Paramount Group	-33.85%	-6.01%	-3.09%

Valuation and Earnings

This table compares Kilroy Realty and Paramount Group’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kilroy Realty	$1.13 billion	3.53	$212.24 million	$1.74	19.51
Paramount Group	$742.79 million	1.42	-$259.74 million	($1.16)	-4.18

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

Volatility and Risk

Kilroy Realty has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Paramount Group has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Dividends

Kilroy Realty pays an annual dividend of $2.16 per share and has a dividend yield of 6.4%. Paramount Group pays an annual dividend of $0.14 per share and has a dividend yield of 2.9%. Kilroy Realty pays out 124.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Paramount Group pays out -12.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Kilroy Realty and Paramount Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kilroy Realty	0	6	5	0	2.45
Paramount Group	2	2	1	0	1.80

Kilroy Realty currently has a consensus target price of $39.00, indicating a potential upside of 14.87%. Paramount Group has a consensus target price of $4.60, indicating a potential downside of 5.06%. Given Kilroy Realty’s stronger consensus rating and higher possible upside, analysts clearly believe Kilroy Realty is more favorable than Paramount Group.

Summary

Kilroy Realty beats Paramount Group on 13 of the 16 factors compared between the two stocks.

About Kilroy Realty

Kilroy Realty Corporation (NYSE: KRC, the company, Kilroy) is a leading U.S. landlord and developer, with operations in San Diego, Greater Los Angeles, the San Francisco Bay Area, Greater Seattle and Austin. The company has earned global recognition for sustainability, building operations, innovation and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the company's approach to modern business environments helps drive creativity and productivity for some of the world's leading technology, entertainment, life science and business services companies. The company is a publicly traded real estate investment trust (REIT) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office, life science and mixed-use projects. As of December 31, 2023, Kilroy's stabilized portfolio totaled approximately 17.0 million square feet of primarily office and life science space that was 85.0% occupied and 86.4% leased. The company also had approximately 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 92.5%. In addition, the company had two in-process life science redevelopment projects totaling approximately 100,000 square feet with total estimated redevelopment costs of $80.0 million and one approximately 875,000 square foot in-process development project with a total estimated investment of $1.0 billion.

About Paramount Group

Paramount Group, Inc. ("Paramount" or the "Company") is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.