Ramco-Gershenson Properties Trust (NYSE: RPT) and Saul Centers (NYSE:BFS) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitabiliy, dividends, earnings, risk and institutional ownership.

Risk & Volatility

Ramco-Gershenson Properties Trust has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Dividends

Ramco-Gershenson Properties Trust pays an annual dividend of $0.88 per share and has a dividend yield of 6.9%. Saul Centers pays an annual dividend of $2.04 per share and has a dividend yield of 3.4%. Ramco-Gershenson Properties Trust pays out 129.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saul Centers pays out 131.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ramco-Gershenson Properties Trust has increased its dividend for 4 consecutive years and Saul Centers has increased its dividend for 3 consecutive years. Ramco-Gershenson Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings for Ramco-Gershenson Properties Trust and Saul Centers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ramco-Gershenson Properties Trust 0 3 4 0 2.57
Saul Centers 0 1 0 0 2.00

Ramco-Gershenson Properties Trust presently has a consensus price target of $18.25, indicating a potential upside of 43.14%. Saul Centers has a consensus price target of $72.00, indicating a potential upside of 21.66%. Given Ramco-Gershenson Properties Trust’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ramco-Gershenson Properties Trust is more favorable than Saul Centers.

Valuation and Earnings

This table compares Ramco-Gershenson Properties Trust and Saul Centers’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ramco-Gershenson Properties Trust $262.65 million 3.85 $164.64 million $0.68 18.75
Saul Centers $218.61 million 5.82 $142.49 million $1.55 38.18

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

Profitability

This table compares Ramco-Gershenson Properties Trust and Saul Centers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ramco-Gershenson Properties Trust 23.23% 7.60% 2.91%
Saul Centers 21.06% 23.95% 3.43%

Institutional and Insider Ownership

46.6% of Saul Centers shares are held by institutional investors. 3.7% of Ramco-Gershenson Properties Trust 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 endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Ramco-Gershenson Properties Trust beats Saul Centers on 9 of the 17 factors compared between the two stocks.

Ramco-Gershenson Properties Trust Company Profile

Ramco-Gershenson Properties Trust is an equity real estate investment trust. The Company’s primary business is the ownership, management, redevelopment, development and operation of retail shopping centers. As of December 31, 2016, it owned and managed multi-anchored shopping centers in 12 metropolitan markets in the United States. It conducts its business through its operating partnership, Ramco-Gershenson Properties, L.P. It invests in large, multi-anchored shopping centers that include national chain store tenants and supermarket tenants. National chain anchor tenants in its centers include, among others, Bed Bath and Beyond, Dick’s Sporting Goods, and Home Depot. Supermarket anchor tenants in its centers include, among others, Publix Super Market, Whole Foods, Kroger and Sprouts. Its shopping centers are located in metropolitan markets, such as Metro Detroit, Southeast Florida, Greater Denver, Cincinnati, St. Louis, Jacksonville, Tampa/Lakeland, Milwaukee, Chicago and Atlanta.

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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