Critical Survey: Rayonier (NYSE:RYN) and EPR Properties (NYSE:EPR)

EPR Properties (NYSE:EPR) and Rayonier (NYSE:RYN) are both mid-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Risk and Volatility

EPR Properties has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Rayonier has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares EPR Properties and Rayonier’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EPR Properties	38.83%	12.78%	5.03%
Rayonier	11.49%	2.85%	1.95%

Institutional and Insider Ownership

74.7% of EPR Properties shares are owned by institutional investors. Comparatively, 89.1% of Rayonier shares are owned by institutional investors. 0.0% of EPR Properties shares are owned by company insiders. Comparatively, 0.9% of Rayonier shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares EPR Properties and Rayonier”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EPR Properties	$718.36 million	6.56	$274.94 million	$3.54	17.37
Rayonier	$484.50 million	13.29	$474.38 million	$0.58	37.32

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for EPR Properties and Rayonier, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EPR Properties	0	5	8	0	2.62
Rayonier	1	4	0	1	2.17

EPR Properties currently has a consensus price target of $65.50, suggesting a potential upside of 6.51%. Rayonier has a consensus price target of $24.00, suggesting a potential upside of 10.89%. Given Rayonier’s higher probable upside, analysts clearly believe Rayonier is more favorable than EPR Properties.

Dividends

EPR Properties pays an annual dividend of $3.72 per share and has a dividend yield of 6.0%. Rayonier pays an annual dividend of $1.04 per share and has a dividend yield of 4.8%. EPR Properties pays out 105.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rayonier pays out 179.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EPR Properties has raised its dividend for 1 consecutive years. EPR Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

EPR Properties beats Rayonier on 11 of the 18 factors compared between the two stocks.

About EPR Properties

EPR Properties is a real estate investment trust focused on experiential properties—places where people gather for recreation, entertainment and education. The company invests in and leases properties to operators, generally through long-term agreements. Its portfolio includes movie theaters, amusement and water parks, ski resorts, golf and other entertainment venues, and educational facilities such as private schools and early childhood education centers. EPR groups its investments into entertainment, recreation and education categories.

About Rayonier

Rayonier is a real estate investment trust focused on owning and managing timberlands in the United States. Its portfolio includes forestland in the U.S. South and Pacific Northwest, where the company grows and harvests timber. The company sells logs and other wood products to customers in industries such as lumber, pulp and paper. It also generates revenue by selling land for uses including real estate development, recreation and conservation. Rayonier traces its roots to 1926, when Rainier Pulp and Paper Company was established in Washington state.