Tanger Factory Outlet Centers (NYSE: SKT) and Retail Properties of America (NYSE:RPAI) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.
Risk & Volatility
Tanger Factory Outlet Centers has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Retail Properties of America has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500.
Valuation & Earnings
This table compares Tanger Factory Outlet Centers and Retail Properties of America’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Tanger Factory Outlet Centers||$488.23 million||4.25||$68.00 million||$0.70||31.39|
|Retail Properties of America||$538.14 million||4.74||$251.49 million||$1.04||11.18|
Retail Properties of America has higher revenue and earnings than Tanger Factory Outlet Centers. Retail Properties of America 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.
This table compares Tanger Factory Outlet Centers and Retail Properties of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Tanger Factory Outlet Centers||13.80%||10.45%||2.66%|
|Retail Properties of America||46.73%||12.36%||6.02%|
This is a summary of current ratings and recommmendations for Tanger Factory Outlet Centers and Retail Properties of America, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Tanger Factory Outlet Centers||2||4||0||0||1.67|
|Retail Properties of America||0||1||5||0||2.83|
Tanger Factory Outlet Centers currently has a consensus target price of $24.88, suggesting a potential upside of 13.22%. Retail Properties of America has a consensus target price of $15.92, suggesting a potential upside of 36.86%. Given Retail Properties of America’s stronger consensus rating and higher possible upside, analysts clearly believe Retail Properties of America is more favorable than Tanger Factory Outlet Centers.
Tanger Factory Outlet Centers pays an annual dividend of $1.37 per share and has a dividend yield of 6.2%. Retail Properties of America pays an annual dividend of $0.66 per share and has a dividend yield of 5.7%. Tanger Factory Outlet Centers pays out 195.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Properties of America pays out 63.5% of its earnings in the form of a dividend. Tanger Factory Outlet Centers has increased its dividend for 25 consecutive years. Tanger Factory Outlet Centers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
95.3% of Tanger Factory Outlet Centers shares are held by institutional investors. Comparatively, 81.1% of Retail Properties of America shares are held by institutional investors. 4.8% of Tanger Factory Outlet Centers shares are held by insiders. Comparatively, 0.4% of Retail Properties of America shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Retail Properties of America beats Tanger Factory Outlet Centers on 11 of the 17 factors compared between the two stocks.
Tanger Factory Outlet Centers Company Profile
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.
Retail Properties of America Company Profile
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.
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