Critical Analysis: Equity LifeStyle Properties (NYSE:ELS) and Kilroy Realty (NYSE:KRC)

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

Risk and Volatility

Equity LifeStyle Properties has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Kilroy Realty has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Institutional & Insider Ownership

97.2% of Equity LifeStyle Properties shares are held by institutional investors. Comparatively, 94.2% of Kilroy Realty shares are held by institutional investors. 1.4% of Equity LifeStyle Properties shares are held by insiders. Comparatively, 2.5% of Kilroy Realty shares are held by 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.

Profitability

This table compares Equity LifeStyle Properties and Kilroy Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity LifeStyle Properties	24.05%	23.12%	6.51%
Kilroy Realty	17.78%	3.53%	1.73%

Dividends

Equity LifeStyle Properties pays an annual dividend of $1.91 per share and has a dividend yield of 2.9%. Kilroy Realty pays an annual dividend of $2.16 per share and has a dividend yield of 5.8%. Equity LifeStyle Properties pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kilroy Realty pays out 129.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Equity LifeStyle Properties and Kilroy Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity LifeStyle Properties	0	3	7	1	2.82
Kilroy Realty	1	6	3	0	2.20

Equity LifeStyle Properties presently has a consensus target price of $73.90, indicating a potential upside of 13.08%. Kilroy Realty has a consensus target price of $40.70, indicating a potential upside of 8.46%. Given Equity LifeStyle Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Equity LifeStyle Properties is more favorable than Kilroy Realty.

Valuation and Earnings

This table compares Equity LifeStyle Properties and Kilroy Realty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity LifeStyle Properties	$1.53 billion	8.18	$367.01 million	$1.95	33.51
Kilroy Realty	$1.13 billion	3.92	$212.24 million	$1.67	22.47

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

Summary

Equity LifeStyle Properties beats Kilroy Realty on 14 of the 17 factors compared between the two stocks.

About Equity LifeStyle Properties

Equity LifeStyle Properties, Inc. is a real estate investment trust, which engages in the ownership and operation of lifestyle-oriented properties consisting primarily of manufactured home, and recreational vehicle communities. It operates through the following segments: Property Operations and Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease properties. The Home Sales and Rentals Operations segment purchases, sells, and leases homes. The company was founded by James M. Hankins in December 1992 and is headquartered in Chicago, IL.

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.