Contrasting Equity Commonwealth (NYSE:EQC) & CyrusOne (NYSE:CONE)

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Equity Commonwealth (NYSE:EQC) and CyrusOne (NASDAQ:CONE) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for Equity Commonwealth and CyrusOne, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Commonwealth 0 1 0 0 2.00
CyrusOne 0 7 9 0 2.56

CyrusOne has a consensus price target of $72.56, indicating a potential upside of 7.15%. Given CyrusOne’s stronger consensus rating and higher probable upside, analysts clearly believe CyrusOne is more favorable than Equity Commonwealth.

Earnings and Valuation

This table compares Equity Commonwealth and CyrusOne’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity Commonwealth $197.02 million 20.60 $272.81 million $0.69 48.25
CyrusOne $821.40 million 9.33 $1.20 million $3.31 20.46

Equity Commonwealth has higher earnings, but lower revenue than CyrusOne. CyrusOne is trading at a lower price-to-earnings ratio than Equity Commonwealth, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

95.8% of Equity Commonwealth shares are owned by institutional investors. 1.6% of Equity Commonwealth shares are owned by company insiders. Comparatively, 1.4% of CyrusOne shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Equity Commonwealth and CyrusOne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Commonwealth 339.90% 15.19% 13.41%
CyrusOne -1.30% -0.08% -0.03%

Risk and Volatility

Equity Commonwealth has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, CyrusOne has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.

Summary

Equity Commonwealth beats CyrusOne on 8 of the 14 factors compared between the two stocks.

About Equity Commonwealth

Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. As of December 31, 2018, EQC's portfolio comprised 10 properties and 5.1 million square feet.

About CyrusOne

CyrusOne (NASDAQ: CONE) is a high-growth real estate investment trust (REIT) specializing in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including 212 Fortune 1000 companies. With a track record of meeting and surpassing the aggressive speed-to-market demands of hyperscale cloud providers, as well as the expanding IT infrastructure requirements of the enterprise, CyrusOne provides the flexibility, reliability, security, and connectivity that foster business growth. CyrusOne offers a tailored, customer service-focused platform and is committed to full transparency in communication, management, and service delivery throughout its 48 data centers worldwide.

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