Simon Property Group (SPG) & Rouse Properties (RSE) Critical Analysis

Simon Property Group (NYSE: SPG) and Rouse Properties (NYSE:RSE) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Simon Property Group and Rouse Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simon Property Group 0 5 9 0 2.64
Rouse Properties 0 0 0 0 N/A

Simon Property Group presently has a consensus target price of $195.85, suggesting a potential upside of 22.74%. Given Simon Property Group’s higher possible upside, equities analysts plainly believe Simon Property Group is more favorable than Rouse Properties.

Dividends

Simon Property Group pays an annual dividend of $7.20 per share and has a dividend yield of 4.5%. Rouse Properties does not pay a dividend. Simon Property Group pays out 127.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simon Property Group has raised its dividend for 7 consecutive years and Rouse Properties has raised its dividend for 4 consecutive years.

Profitability

This table compares Simon Property Group and Rouse Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Simon Property Group 32.07% 39.29% 6.03%
Rouse Properties -12.34% -9.28% -1.58%

Valuation & Earnings

This table compares Simon Property Group and Rouse Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Simon Property Group $5.49 billion 9.03 $4.02 billion $5.63 28.34
Rouse Properties N/A N/A N/A N/A N/A

Simon Property Group has higher revenue and earnings than Rouse Properties.

Institutional and Insider Ownership

95.2% of Simon Property Group shares are owned by institutional investors. 8.4% of Simon Property Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Simon Property Group has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Rouse Properties has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Summary

Simon Property Group beats Rouse Properties on 10 of the 12 factors compared between the two stocks.

Simon Property Group Company Profile

Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. Simon Property Group, L.P. (Operating Partnership), is the Company’s partnership subsidiary that owns all of its real estate properties and other assets. As of December 31, 2016, the Company owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 Premium Outlets, 14 Mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. As of December 31, 2016, it had redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at 27 properties in the United States and it had one outlet and one other retail project under development.

Rouse Properties Company Profile

Rouse Properties, Inc. is a United States-based real estate investment company. The Company owns and manages regional malls in protected markets or submarkets in the United States. The Company operates through the retail segment, which includes the operation, development and management of regional malls. The Company’s portfolio includes approximately 40 malls and retail centers in over 20 states totaling approximately 24.9 million square feet of retail space. The Company’s properties include Animas Valley Mall; Bayshore Mall; Birchwood Mall; Cache Valley Mall; Chesterfield Towne Center; Chula Vista Center; Colony Square Mall; Fig Garden Village; Grand Traverse Mall; Greenville Mall; Lakeland Square; Lansing Mall; Mall St. Vincent; NewPark Mall; North Plains Mall; Pierre Bossier Mall; Sikes Senter; Silver Lake Mall; Southland Center; Southland Mall; Spring Hill Mall; Valley Hills Mall; Vista Ridge Mall; Washington Park Mall; West Valley Mall; Westwood Mall, and White Mountain Mall.

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