Retail Properties of America (NYSE: RPAI) and GGP (NYSE:GGP) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.
Retail Properties of America pays an annual dividend of $0.66 per share and has a dividend yield of 5.4%. GGP pays an annual dividend of $0.88 per share and has a dividend yield of 3.8%. Retail Properties of America pays out 101.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GGP pays out 122.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GGP has raised its dividend for 6 consecutive years. Retail Properties of America is clearly the better dividend stock, given its higher yield and lower payout ratio.
79.1% of Retail Properties of America shares are held by institutional investors. Comparatively, 96.3% of GGP shares are held by institutional investors. 0.4% of Retail Properties of America shares are held by company insiders. Comparatively, 35.6% of GGP shares are held 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.
This table compares Retail Properties of America and GGP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Retail Properties of America||28.84%||7.61%||3.71%|
This is a breakdown of recent recommendations for Retail Properties of America and GGP, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Retail Properties of America||0||1||5||0||2.83|
Retail Properties of America currently has a consensus target price of $16.08, indicating a potential upside of 32.37%. GGP has a consensus target price of $25.36, indicating a potential upside of 10.32%. Given Retail Properties of America’s stronger consensus rating and higher probable upside, analysts plainly believe Retail Properties of America is more favorable than GGP.
Risk and Volatility
Retail Properties of America has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, GGP has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.
Earnings and Valuation
This table compares Retail Properties of America and GGP’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Retail Properties of America||$583.14 million||4.73||$166.81 million||$0.65||18.69|
|GGP||$2.35 billion||9.37||$1.29 billion||$0.72||31.93|
GGP has higher revenue and earnings than Retail Properties of America. Retail Properties of America is trading at a lower price-to-earnings ratio than GGP, indicating that it is currently the more affordable of the two stocks.
GGP beats Retail Properties of America on 12 of the 17 factors compared between the two stocks.
About Retail Properties of America
Retail Properties of America, Inc. is a real estate investment trust (REIT). The Company owns and operates shopping centers located in the United States. As of December 31, 2016, it owned 156 retail operating properties representing 25,832,000 square feet of gross leasable area (GLA). Its retail operating portfolio includes neighborhood and community centers, power centers, and lifestyle centers and multi-tenant retail-focused mixed-use properties, as well as single-user retail properties. As of December 31, 2016, it had identified 10 target markets, including Dallas, Washington, District of Columbia/Baltimore, New York, Atlanta, Seattle, Chicago, Houston, San Antonio, Phoenix and Austin. Its properties include 23rd Street Plaza, Azalea Square I, Boulevard Plaza, Brown’s Lane, Cranberry Square, Denton Crossing, Dorman Center I & II, Edgemont Town Center, Edwards Multiplex, Green’s Corner, Home Depot Plaza, Lake Mary Pointe, Lincoln Park, University Town Center and Winchester Commons.
GGP Inc. (GGP), formerly General Growth Properties, Inc., is a self-administered and self-managed real estate investment trust (REIT). The Company operates as a holding company, which is engaged in the operation, development and management of retail and other rental properties, primarily regional malls. As of December 31, 2016, the Company owned, either entirely or with joint venture partners, 127 retail properties located throughout the United States comprising approximately 125 million square feet of gross leasable area (GLA). As of December 31, 2016, the Company’s retail properties included 200 Lafayette, The Shoppes at Buckland Hills, Northridge Fashion Center, Brass Mill Center, Jordan Creek Town Center, Westroads Mall and Stonestown Galleria. The Company’s business is conducted through GGP Operating Partnership, LP (GGPOP), GGP Nimbus, LP (GGPN) and GGP Limited Partnership (GGPLP, and together with GGPN and GGPOP, the Operating Partnerships), subsidiaries of GGP.
Receive News & Ratings for Retail Properties of America Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Retail Properties of America and related companies with MarketBeat.com's FREE daily email newsletter.