Simon Property Group (NYSE: SPG) and Acadia Realty Trust (NYSE:AKR) are both mid-cap retail reits companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Profitability

This table compares Simon Property Group and Acadia Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Simon Property Group 31.96% 41.85% 6.09%
Acadia Realty Trust 25.34% 2.77% 1.50%

Volatility and Risk

Simon Property Group has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Acadia Realty Trust has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Insider & Institutional Ownership

95.2% of Simon Property Group shares are owned by institutional investors. 8.4% of Simon Property Group shares are owned by company insiders. Comparatively, 1.7% of Acadia Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Simon Property Group and Acadia Realty Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Simon Property Group $5.44 billion 19.27 $1.84 billion $5.66 28.93
Acadia Realty Trust $189.94 million 12.88 $72.77 million $0.72 40.60

Simon Property Group has higher revenue and earnings than Acadia Realty Trust. Simon Property Group is trading at a lower price-to-earnings ratio than Acadia Realty Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Simon Property Group and Acadia Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simon Property Group 0 5 10 0 2.67
Acadia Realty Trust 0 1 3 0 2.75

Simon Property Group presently has a consensus target price of $192.33, suggesting a potential upside of 17.46%. Acadia Realty Trust has a consensus target price of $33.50, suggesting a potential upside of 14.61%. Given Simon Property Group’s higher probable upside, research analysts plainly believe Simon Property Group is more favorable than Acadia Realty Trust.

Dividends

Simon Property Group pays an annual dividend of $7.20 per share and has a dividend yield of 4.4%. Acadia Realty Trust pays an annual dividend of $1.04 per share and has a dividend yield of 3.6%. Simon Property Group pays out 127.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Acadia Realty Trust pays out 144.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simon Property Group has increased its dividend for 4 consecutive years and Acadia Realty Trust has increased its dividend for 7 consecutive years. Simon Property Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Simon Property Group beats Acadia Realty Trust on 13 of the 17 factors compared between the two stocks.

Simon Property Group Company Profile

Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. Simon Property Group, L.P. (Operating Partnership), is the Company’s partnership subsidiary that owns all of its real estate properties and other assets. As of December 31, 2016, the Company owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 Premium Outlets, 14 Mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. As of December 31, 2016, it had redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at 27 properties in the United States and it had one outlet and one other retail project under development.

Acadia Realty Trust Company Profile

Acadia Realty Trust is a real estate investment trust. The Company is focused on the ownership, acquisition, development and management of retail properties located in the United States. It operates through three segments: Core Portfolio, Funds and Structured Financing. Core Portfolio and Fund properties primarily consist of street and urban retail, and dense suburban shopping centers. Funds holds primarily retail real estate in which it co-invests with institutional investors. Structured Financing consists of earnings and expenses related to notes and mortgages receivable, which are held within the Core Portfolio or the Funds. As of December 31, 2016, it had ownership interests in 182 properties within its core portfolio. In the Core Portfolio segment, the Company owned an interest in a 311,000 square foot shopping center, a 28,000 square foot retail and an interest in an 87,000 square foot retail property, among others, as of December 31, 2016.

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