Vornado Realty Trust Stock: Value VS Growth in 2025

Introduction

Vornado Realty Trust (VNO) is a leading real estate investment trust (REIT) with a diversified portfolio of office, retail, and residential properties in the United States. The company has a long history of delivering strong returns to investors, but its stock has underperformed the broader market in recent years. In this article, we will compare Vornado Realty Trust to two other REITs, Prologis (PLD) and Crown Castle (CCI), to assess its relative value and growth potential.

Company Overview

Vornado Realty Trust

Vornado Realty Trust is a fully integrated real estate investment trust (REIT) that owns, manages, and develops office, retail, and residential properties in the United States. The company's portfolio includes some of the most iconic properties in New York City, including One World Trade Center, the Waldorf Astoria Hotel, and the Penn Plaza complex. Vornado Realty Trust has a long history of delivering strong returns to investors, but its stock has underperformed the broader market in recent years.

Prologis

Prologis is a global leader in logistics real estate. The company owns, manages, and develops distribution centers, warehouses, and other logistics facilities around the world. Prologis's customers include some of the world's largest retailers, manufacturers, and distributors. The company has a proven track record of delivering strong returns to investors, and its stock has outperformed the broader market in recent years.

Crown Castle

Crown Castle is a leading provider of shared communications infrastructure in the United States. The company owns, operates, and leases towers, small cells, and other infrastructure that is used by wireless carriers to provide their services. Crown Castle has a long history of delivering strong returns to investors, and its stock has outperformed the broader market in recent years.

Financial Performance

Vornado Realty Trust

Vornado Realty Trust reported revenue of $3.7 billion in 2021, a decrease of 1.2% from the previous year. The company's net income was $1.2 billion, a decrease of 14.1% from the previous year. Vornado Realty Trust's funds from operations (FFO) were $1.9 billion, a decrease of 10.2% from the previous year.

Prologis

Prologis reported revenue of $11.3 billion in 2021, an increase of 16.3% from the previous year. The company's net income was $3.1 billion, an increase of 20.5% from the previous year. Prologis's funds from operations (FFO) were $4.6 billion, an increase of 18.9% from the previous year.

Crown Castle

Crown Castle reported revenue of $7.2 billion in 2021, an increase of 11.1% from the previous year. The company's net income was $2.6 billion, an increase of 14.6% from the previous year. Crown Castle's funds from operations (FFO) were $3.8 billion, an increase of 12.6% from the previous year.

Valuation

Vornado Realty Trust

Vornado Realty Trust is currently trading at a price-to-funds from operations (P/FFO) ratio of 13.5x. This is a discount to the P/FFO ratio of the broader REIT market, which is currently trading at a multiple of 16.5x.

Prologis

Prologis is currently trading at a P/FFO ratio of 24.5x. This is a premium to the P/FFO ratio of the broader REIT market. However, Prologis's premium valuation is justified by its strong growth prospects.

Crown Castle

Crown Castle is currently trading at a P/FFO ratio of 22.0x. This is a premium to the P/FFO ratio of the broader REIT market. However, Crown Castle's premium valuation is justified by its strong growth prospects.

Growth Potential

Vornado Realty Trust

Vornado Realty Trust has a number of growth initiatives in place, including the development of new office and residential properties in New York City and the expansion of its logistics portfolio. However, the company's growth prospects are limited by the slow recovery of the office market in New York City.

Prologis

Prologis has a strong growth pipeline, driven by the increasing demand for logistics space from e-commerce retailers and other businesses. The company is expanding its operations in key markets around the world, including the United States, Europe, and Asia.

Crown Castle

Crown Castle has a strong growth pipeline, driven by the increasing demand for wireless data traffic. The company is investing in the development of new towers and small cells, and it is expanding its operations into new markets.

Dividend Yield

Vornado Realty Trust

Vornado Realty Trust has a dividend yield of 5.1%. This is a higher dividend yield than the average dividend yield of the broader REIT market, which is currently 3.5%.

Prologis

Prologis has a dividend yield of 2.0%. This is a lower dividend yield than the average dividend yield of the broader REIT market. However, Prologis's dividend yield is expected to grow in the future as the company continues to expand its operations.

Crown Castle

Crown Castle has a dividend yield of 3.0%. This is a higher dividend yield than the average dividend yield of the broader REIT market. Crown Castle's dividend yield is expected to grow in the future as the company continues