DDR (NYSE: DDR) and Tanger Factory Outlet Centers (NYSE:SKT) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.
DDR pays an annual dividend of $0.76 per share and has a dividend yield of 8.8%. Tanger Factory Outlet Centers pays an annual dividend of $1.37 per share and has a dividend yield of 5.5%. DDR pays out -1,900.0% of its earnings in the form of a dividend. Tanger Factory Outlet Centers pays out 221.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DDR has raised its dividend for 25 consecutive years and Tanger Factory Outlet Centers has raised its dividend for 7 consecutive years. DDR is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares DDR and Tanger Factory Outlet Centers’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|DDR||$969.51 million||3.26||$60.01 million||($0.04)||-214.75|
|Tanger Factory Outlet Centers||$465.83 million||5.10||$193.74 million||$0.62||40.53|
Tanger Factory Outlet Centers has lower revenue, but higher earnings than DDR. DDR is trading at a lower price-to-earnings ratio than Tanger Factory Outlet Centers, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
DDR has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Tanger Factory Outlet Centers has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for DDR and Tanger Factory Outlet Centers, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Tanger Factory Outlet Centers||1||4||1||0||2.00|
DDR currently has a consensus price target of $11.21, indicating a potential upside of 30.48%. Tanger Factory Outlet Centers has a consensus price target of $24.88, indicating a potential downside of 1.01%. Given DDR’s stronger consensus rating and higher possible upside, equities research analysts plainly believe DDR is more favorable than Tanger Factory Outlet Centers.
Insider & Institutional Ownership
79.9% of DDR shares are owned by institutional investors. Comparatively, 99.5% of Tanger Factory Outlet Centers shares are owned by institutional investors. 16.1% of DDR shares are owned by insiders. Comparatively, 4.8% of Tanger Factory Outlet Centers shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares DDR and Tanger Factory Outlet Centers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Tanger Factory Outlet Centers||12.34%||8.98%||2.37%|
DDR beats Tanger Factory Outlet Centers on 9 of the 17 factors compared between the two stocks.
DDR Corp. is a self-administered and self-managed real estate investment trust. It operates through two segments: shopping centers and loan investments. It is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers. As of December 31, 2016, it owned and managed approximately 106 million total square feet of gross leasable area (GLA). As of December 31, 2016, the portfolio properties included 319 shopping centers (including 152 centers owned through joint ventures). As of December 31, 2016, the portfolio properties also included over 650 acres of undeveloped land, including parcels located adjacent to certain of the shopping centers. As of December 31, 2016, the portfolio properties aggregated to 75.8 million square feet of Company-owned GLA located in 35 states, plus Puerto Rico. These centers are in the Southeast and Midwest, with significant concentrations in Florida, Georgia, Ohio and North Carolina, as well as Puerto Rico.
About Tanger Factory Outlet Centers
Tanger Factory Outlet Centers, Inc. is an owner and operator of outlet centers in the United States and Canada. The Company is a fully-integrated, self-administered and self-managed real estate investment trust (REIT), which focuses on developing, acquiring, owning, operating and managing outlet shopping centers. As of December 31, 2016, its portfolio consisted of 36 outlet centers, with a total gross leasable area of approximately 12.7 million square feet, which were 98% occupied and contained over 2,600 stores representing approximately 400 store brands. Its outlet centers and other assets are held by, and all of its operations are conducted by, Tanger Properties Limited Partnership and subsidiaries (Operating Partnership). The Company owns the majority of the units of partnership interest issued by the Operating Partnership, through its subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust controls the Operating Partnership as its sole general partner.
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