General Growth Properties (NYSE: GGP) and Saul Centers (NYSE:BFS) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.

Volatility and Risk

General Growth Properties has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares General Growth Properties and Saul Centers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
General Growth Properties 50.01% 13.57% 5.07%
Saul Centers 21.15% 23.85% 3.42%

Analyst Recommendations

This is a summary of current recommendations and price targets for General Growth Properties and Saul Centers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
General Growth Properties 1 5 4 0 2.30
Saul Centers 0 1 1 0 2.50

General Growth Properties presently has a consensus target price of $25.80, indicating a potential upside of 18.78%. Saul Centers has a consensus target price of $72.00, indicating a potential upside of 15.64%. Given General Growth Properties’ higher probable upside, analysts plainly believe General Growth Properties is more favorable than Saul Centers.

Valuation & Earnings

This table compares General Growth Properties and Saul Centers’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
General Growth Properties $2.51 billion 7.63 $1.76 billion $1.19 18.25
Saul Centers $221.81 million 6.12 $144.68 million $1.58 39.41

General Growth Properties has higher revenue and earnings than Saul Centers. General Growth Properties is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

95.3% of General Growth Properties shares are held by institutional investors. Comparatively, 45.2% of Saul Centers shares are held by institutional investors. 35.6% of General Growth Properties shares are held by company insiders. Comparatively, 48.8% of Saul Centers shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

General Growth Properties pays an annual dividend of $0.88 per share and has a dividend yield of 4.1%. Saul Centers pays an annual dividend of $2.04 per share and has a dividend yield of 3.3%. General Growth Properties pays out 73.9% of its earnings in the form of a dividend. Saul Centers pays out 129.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Growth Properties has raised its dividend for 5 consecutive years and Saul Centers has raised its dividend for 3 consecutive years. General Growth Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

General Growth Properties beats Saul Centers on 12 of the 17 factors compared between the two stocks.

General Growth Properties Company Profile

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.

Saul Centers Company Profile

Saul Centers, Inc. operates as a real estate investment trust. The Company’s principal business activity is the ownership, management and development of income-producing properties. It operates through two segments: Shopping Centers and Mixed-Use Properties. The Company, which conducts all of its activities through its subsidiaries, the Saul Holdings Limited Partnership (Operating Partnership) and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-used properties in the Washington, District of Columbia/Baltimore metropolitan area. As of December 31, 2016, it properties (the Current Portfolio Properties) consisted of 49 shopping center properties (the Shopping Centers), six mixed-use properties, which consists of office, retail and multi-family residential uses (the Mixed-Use Properties) and three (non-operating) development properties.

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