Critical Review: Urban Edge Properties (NYSE:UE) vs. Retail Opportunity Investments Corp. (ROIC)
Urban Edge Properties (NYSE: UE) and Retail Opportunity Investments Corp. (NASDAQ:ROIC) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitabiliy, valuation, analyst recommendations, dividends and institutional ownership.
Urban Edge Properties pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. Retail Opportunity Investments Corp. pays an annual dividend of $0.75 per share and has a dividend yield of 3.7%. Urban Edge Properties pays out 87.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Opportunity Investments Corp. pays out 227.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Urban Edge Properties and Retail Opportunity Investments Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Urban Edge Properties||27.04%||16.72%||4.87%|
|Retail Opportunity Investments Corp.||13.92%||2.71%||1.31%|
This is a summary of current recommendations for Urban Edge Properties and Retail Opportunity Investments Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Urban Edge Properties||1||0||0||0||1.00|
|Retail Opportunity Investments Corp.||0||4||3||0||2.43|
Retail Opportunity Investments Corp. has a consensus target price of $23.50, suggesting a potential upside of 15.59%. Given Retail Opportunity Investments Corp.’s stronger consensus rating and higher possible upside, analysts plainly believe Retail Opportunity Investments Corp. is more favorable than Urban Edge Properties.
Valuation and Earnings
This table compares Urban Edge Properties and Retail Opportunity Investments Corp.’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Urban Edge Properties||$379.02 million||7.23||$230.14 million||$1.01||25.21|
|Retail Opportunity Investments Corp.||$254.96 million||8.75||$162.92 million||$0.33||61.61|
Urban Edge Properties has higher revenue and earnings than Retail Opportunity Investments Corp.. Urban Edge Properties is trading at a lower price-to-earnings ratio than Retail Opportunity Investments Corp., indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
81.6% of Urban Edge Properties shares are held by institutional investors. Comparatively, 96.6% of Retail Opportunity Investments Corp. shares are held by institutional investors. 4.7% of Urban Edge Properties shares are held by company insiders. Comparatively, 2.2% of Retail Opportunity Investments Corp. shares are held 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.
Risk & Volatility
Urban Edge Properties has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Retail Opportunity Investments Corp. has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.
Urban Edge Properties Company Profile
Urban Edge Properties is a real estate investment trust. The Company is focused on managing, developing, redeveloping and acquiring retail real estate in urban communities, in the New York metropolitan region. Urban Edge Properties LP (UELP or the Operating Partnership) serves as its partnership subsidiary and owns, through affiliates, all of its real estate properties and other assets. As of December 31, 2016, its portfolio consisted of 79 shopping centers, three malls and a warehouse park adjacent to one of its centers totaling 14.8 million square feet. As of December 31, 2016, it leased 19 properties under ground and/or building leases. As of December 31, 2016, it had approximately 1,200 leases. Its shopping centers and malls are located at California, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, South Carolina, Virginia and Puerto Rico. Its shopping centers and malls include Signal Hill, Vallejo, Walnut Creek, Newington and others.
Retail Opportunity Investments Corp. Company Profile
Retail Opportunity Investments Corp. (ROIC) is a fully integrated, self-managed real estate investment trust (REIT). The Company specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United States, anchored by supermarkets and drugstores. Retail Opportunity Investments Partnership, LP is the operating partnership of the Company. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business. As of December 31, 2016, the Company’s portfolio consisted of 82 properties (81 retail and one office) totaling approximately 9.4 million square feet of gross leasable area (GLA). As of December 31, 2016, the Company’s portfolio was approximately 97.6% leased.
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