Equity Commonwealth (NYSE:EQC) & Starwood Property Trust (NYSE:STWD) Head to Head Contrast

Equity Commonwealth (NYSE:EQC) and Starwood Property Trust (NYSE:STWD) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Equity Commonwealth and Starwood Property Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Commonwealth	0	0	0	0	0.00
Starwood Property Trust	0	2	5	1	2.88

Starwood Property Trust has a consensus price target of $22.21, indicating a potential upside of 22.03%. Given Starwood Property Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Starwood Property Trust is more favorable than Equity Commonwealth.

Earnings and Valuation

This table compares Equity Commonwealth and Starwood Property Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Commonwealth	$58.43 million	2.93	$91.16 million	$0.39	4.09
Starwood Property Trust	$961.90 million	6.39	$339.21 million	$1.10	16.55

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Equity Commonwealth	82.00%	2.09%	1.96%
Starwood Property Trust	18.82%	9.93%	1.00%

Risk & Volatility

Equity Commonwealth has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Starwood Property Trust has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500.

Institutional and Insider Ownership

96.0% of Equity Commonwealth shares are held by institutional investors. Comparatively, 49.8% of Starwood Property Trust shares are held by institutional investors. 2.1% of Equity Commonwealth shares are held by company insiders. Comparatively, 5.9% of Starwood Property Trust shares are held 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.

Summary

Starwood Property Trust beats Equity Commonwealth on 12 of the 15 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. EQC's portfolio is comprised of four properties totaling 1.5 million square feet.

About Starwood Property Trust

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2009 and is headquartered in Greenwich, Connecticut.