Analyzing COPT Defense Properties (NYSE:CDP) & Orion Office REIT (NYSE:ONL)

COPT Defense Properties (NYSE:CDP) and Orion Office REIT (NYSE:ONL) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

79.9% of Orion Office REIT shares are held by institutional investors. 1.7% of COPT Defense Properties shares are held by insiders. Comparatively, 1.6% of Orion Office REIT shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares COPT Defense Properties and Orion Office REIT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
COPT Defense Properties	$763.92 million	5.41	$152.32 million	$1.38	26.42
Orion Office REIT	$145.92 million	1.13	-$139.31 million	($2.56)	-1.13

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

Volatility & Risk

COPT Defense Properties has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Orion Office REIT has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.

Profitability

This table compares COPT Defense Properties and Orion Office REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
COPT Defense Properties	20.10%	10.02%	3.51%
Orion Office REIT	-98.36%	-21.88%	-11.79%

Dividends

COPT Defense Properties pays an annual dividend of $1.28 per share and has a dividend yield of 3.5%. Orion Office REIT pays an annual dividend of $0.08 per share and has a dividend yield of 2.8%. COPT Defense Properties pays out 92.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orion Office REIT pays out -3.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations for COPT Defense Properties and Orion Office REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
COPT Defense Properties	0	3	5	0	2.63
Orion Office REIT	1	0	1	0	2.00

COPT Defense Properties presently has a consensus price target of $35.00, indicating a potential downside of 3.99%. Orion Office REIT has a consensus price target of $3.50, indicating a potential upside of 20.90%. Given Orion Office REIT’s higher probable upside, analysts clearly believe Orion Office REIT is more favorable than COPT Defense Properties.

Summary

COPT Defense Properties beats Orion Office REIT on 12 of the 16 factors compared between the two stocks.

About COPT Defense Properties

COPT Defense Properties is a real estate investment trust. It acquires, develops, manages, sells, and leases out office properties and data centers. The firm operates through the following segments: Defense/Information Technology Locations, Regional Office, Wholesale Data Center, and Other. The company was founded on January 22,1988 and is headquartered in Columbia, MD.

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.