Critical Survey: Public Storage (NYSE:PSA) vs. Retail Opportunity Investments (NYSE:ROIC)

Public Storage (NYSE:PSA) and Retail Opportunity Investments (NASDAQ:ROIC) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Valuation & Earnings

This table compares Public Storage and Retail Opportunity Investments’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Public Storage $2.85 billion 11.73 $1.52 billion $10.75 17.78
Retail Opportunity Investments $295.04 million 4.56 $48.84 million $1.10 10.50

Public Storage has higher revenue and earnings than Retail Opportunity Investments. Retail Opportunity Investments is trading at a lower price-to-earnings ratio than Public Storage, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Public Storage has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500. Comparatively, Retail Opportunity Investments has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Public Storage and Retail Opportunity Investments, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Public Storage 6 5 2 0 1.69
Retail Opportunity Investments 0 4 4 0 2.50

Public Storage currently has a consensus target price of $217.46, suggesting a potential upside of 13.79%. Retail Opportunity Investments has a consensus target price of $13.43, suggesting a potential upside of 16.26%. Given Retail Opportunity Investments’ stronger consensus rating and higher probable upside, analysts clearly believe Retail Opportunity Investments is more favorable than Public Storage.

Profitability

This table compares Public Storage and Retail Opportunity Investments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Public Storage 52.93% 30.33% 13.31%
Retail Opportunity Investments 16.20% 3.72% 1.62%

Institutional & Insider Ownership

79.7% of Public Storage shares are held by institutional investors. Comparatively, 91.1% of Retail Opportunity Investments shares are held by institutional investors. 13.8% of Public Storage shares are held by insiders. Comparatively, 2.5% of Retail Opportunity Investments shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Public Storage pays an annual dividend of $8.00 per share and has a dividend yield of 4.2%. Retail Opportunity Investments pays an annual dividend of $0.80 per share and has a dividend yield of 6.9%. Public Storage pays out 74.4% of its earnings in the form of a dividend. Retail Opportunity Investments pays out 72.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Retail Opportunity Investments has raised its dividend for 10 consecutive years. Retail Opportunity Investments is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Retail Opportunity Investments beats Public Storage on 9 of the 17 factors compared between the two stocks.

Public Storage Company Profile

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns and operates self-storage facilities. At March 31, 2019, we had: (i) interests in 2,444 self-storage facilities located in 38 states with approximately 164 million net rentable square feet in the United States, (ii) an approximate 35% common equity interest in Shurgard Self Storage SA (Euronext Brussels:SHUR) which owned 231 self-storage facilities located in seven Western European nations with approximately 13 million net rentable square feet operated under the “Shurgard” brand and (iii) an approximate 42% common equity interest in PS Business Parks, Inc. (NYSE:PSB) which owned and operated approximately 28 million rentable square feet of commercial space at March 31, 2019. Our headquarters are located in Glendale, California.

Retail Opportunity Investments Company Profile

Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely-populated, metropolitan markets across the West Coast. As of March 31, 2019, ROIC owned 90 shopping centers encompassing approximately 10.3 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services and Standard & Poor's.

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