DDR Corp. (NYSE: DDR) and Macerich Company (The) (NYSE:MAC) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, risk, profitabiliy, valuation, dividends and earnings.

Risk and Volatility

DDR Corp. has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Macerich Company (The) has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Earnings & Valuation

This table compares DDR Corp. and Macerich Company (The)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DDR Corp. $1.00 billion 3.64 $652.13 million ($0.16) -62.13
Macerich Company (The) $1.08 billion 7.78 $644.59 million $1.14 51.96

DDR Corp. has higher revenue, but lower earnings than Macerich Company (The). DDR Corp. is trading at a lower price-to-earnings ratio than Macerich Company (The), indicating that it is currently the more affordable of the two stocks.

Dividends

DDR Corp. pays an annual dividend of $0.76 per share and has a dividend yield of 7.6%. Macerich Company (The) pays an annual dividend of $2.84 per share and has a dividend yield of 4.8%. DDR Corp. pays out -475.0% of its earnings in the form of a dividend. Macerich Company (The) pays out 249.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DDR Corp. has increased its dividend for 6 consecutive years and Macerich Company (The) has increased its dividend for 6 consecutive years. DDR Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for DDR Corp. and Macerich Company (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DDR Corp. 1 10 3 0 2.14
Macerich Company (The) 2 9 3 0 2.07

DDR Corp. presently has a consensus target price of $14.38, suggesting a potential upside of 44.62%. Macerich Company (The) has a consensus target price of $71.15, suggesting a potential upside of 20.11%. Given DDR Corp.’s stronger consensus rating and higher possible upside, equities research analysts plainly believe DDR Corp. is more favorable than Macerich Company (The).

Institutional & Insider Ownership

82.4% of DDR Corp. shares are held by institutional investors. Comparatively, 94.8% of Macerich Company (The) shares are held by institutional investors. 16.2% of DDR Corp. shares are held by company insiders. Comparatively, 3.8% of Macerich Company (The) shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares DDR Corp. and Macerich Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DDR Corp. -4.17% 1.60% 0.55%
Macerich Company (The) 16.01% 3.72% 1.67%

Summary

Macerich Company (The) beats DDR Corp. on 8 of the 14 factors compared between the two stocks.

About DDR Corp.

DDR Corp. is a self-administered and self-managed real estate investment trust. It operates through two segments: shopping centers and loan investments. It is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers. As of December 31, 2016, it owned and managed approximately 106 million total square feet of gross leasable area (GLA). As of December 31, 2016, the portfolio properties included 319 shopping centers (including 152 centers owned through joint ventures). As of December 31, 2016, the portfolio properties also included over 650 acres of undeveloped land, including parcels located adjacent to certain of the shopping centers. As of December 31, 2016, the portfolio properties aggregated to 75.8 million square feet of Company-owned GLA located in 35 states, plus Puerto Rico. These centers are in the Southeast and Midwest, with significant concentrations in Florida, Georgia, Ohio and North Carolina, as well as Puerto Rico.

About Macerich Company (The)

The Macerich Company is a self-administered and self-managed real estate investment trust (REIT). The Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company owns ownership interests in, The Macerich Partnership, L.P. (the Operating Partnership). As of December 31, 2016, the Company, through its operating partnership, had ownership interests in 50 regional shopping centers and seven community/power shopping centers. These 57 regional and community/power shopping centers consisted of approximately 56 million square feet of gross leasable area (GLA), as of December 31, 2016. The Company’s properties include Danbury Fair Mall, Desert Sky Mall, Fresno Fashion Fair, NorthPark Mall, Oaks, The, Towne Mall, Valley Mall, Arrowhead Towne Center, Deptford Mall and South Plains Mall.

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