Critical Survey: COPT Defense Properties (NYSE:CDP) versus American Assets Trust (NYSE:AAT)

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

Volatility and Risk

American Assets Trust has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, COPT Defense Properties has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Profitability

This table compares American Assets Trust and COPT Defense Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Assets Trust	12.00%	4.62%	1.78%
COPT Defense Properties	-15.75%	-7.52%	-2.71%

Dividends

American Assets Trust pays an annual dividend of $1.34 per share and has a dividend yield of 5.0%. COPT Defense Properties pays an annual dividend of $1.18 per share and has a dividend yield of 3.8%. American Assets Trust pays out 150.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. COPT Defense Properties pays out -113.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for American Assets Trust and COPT Defense Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Assets Trust	0	1	0	0	2.00
COPT Defense Properties	0	3	5	0	2.63

American Assets Trust currently has a consensus price target of $26.00, suggesting a potential downside of 2.33%. COPT Defense Properties has a consensus price target of $30.00, suggesting a potential downside of 3.13%. Given American Assets Trust’s higher probable upside, analysts clearly believe American Assets Trust is more favorable than COPT Defense Properties.

Insider and Institutional Ownership

90.4% of American Assets Trust shares are owned by institutional investors. 37.3% of American Assets Trust shares are owned by company insiders. Comparatively, 1.1% of COPT Defense Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares American Assets Trust and COPT Defense Properties”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Assets Trust	$445.27 million	3.64	$64.69 million	$0.89	29.91
COPT Defense Properties	$684.98 million	5.09	-$73.47 million	($1.04)	-29.78

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

Summary

American Assets Trust beats COPT Defense Properties on 11 of the 16 factors compared between the two stocks.

About American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.

About COPT Defense Properties

COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (USG) defense installations and missions (referred to as its Defense/IT Portfolio). The Company's tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of December 31, 2023, the Company's Defense/IT Portfolio of 190 properties, including 24 owned through unconsolidated joint ventures, encompassed 21.7 million square feet and was 97.2% leased.