Prologis (NYSE:PLD) vs. Lineage (NASDAQ:LINE) Critical Review

Lineage (NASDAQ:LINE) and Prologis (NYSE:PLD) are both real estate companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Profitability

This table compares Lineage and Prologis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lineage	-3.15%	-1.83%	-0.88%
Prologis	45.79%	7.29%	4.25%

Risk and Volatility

Lineage has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Prologis has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.

Institutional & Insider Ownership

93.5% of Prologis shares are held by institutional investors. 71.6% of Lineage shares are held by insiders. Comparatively, 0.5% of Prologis shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Lineage and Prologis, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lineage	4	9	5	0	2.06
Prologis	0	7	16	0	2.70

Lineage presently has a consensus price target of $43.62, suggesting a potential upside of 7.34%. Prologis has a consensus price target of $154.57, suggesting a potential upside of 11.16%. Given Prologis’ stronger consensus rating and higher possible upside, analysts clearly believe Prologis is more favorable than Lineage.

Valuation & Earnings

This table compares Lineage and Prologis”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lineage	$5.36 billion	1.73	-$100.00 million	($0.62)	-65.55
Prologis	$8.79 billion	14.76	$3.33 billion	$4.49	30.97

Prologis has higher revenue and earnings than Lineage. Lineage is trading at a lower price-to-earnings ratio than Prologis, indicating that it is currently the more affordable of the two stocks.

Dividends

Lineage pays an annual dividend of $2.13 per share and has a dividend yield of 5.2%. Prologis pays an annual dividend of $4.28 per share and has a dividend yield of 3.1%. Lineage pays out -343.5% of its earnings in the form of a dividend. Prologis pays out 95.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Prologis has raised its dividend for 12 consecutive years. Lineage is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Prologis beats Lineage on 14 of the 17 factors compared between the two stocks.

About Lineage

Lineage, Inc. is the world’s largest global temperature-controlled warehouse REIT with a network of over 480 strategically located facilities totaling over 84.1 million square feet and 3.0 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific. Coupling end-to-end supply chain solutions and technology, Lineage partners with some of the world’s largest food and beverage producers, retailers, and distributors to help increase distribution efficiency, advance sustainability, minimize supply chain waste, and, most importantly, feed the world.

About Prologis

Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. At March 31, 2024, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.2 billion square feet (115 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 6,700 customers principally across two major categories: business-to-business and retail/online fulfillment.