Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Rouse Properties (NYSE:RSE) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitabiliy, analyst recommendations, dividends and valuation.

Risk and Volatility

Pennsylvania Real Estate Investment Trust has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Rouse Properties has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Pennsylvania Real Estate Investment Trust and Rouse Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 1 4 0 0 1.80
Rouse Properties 0 0 0 0 N/A

Pennsylvania Real Estate Investment Trust currently has a consensus price target of $15.88, suggesting a potential upside of 34.65%. Given Pennsylvania Real Estate Investment Trust’s higher possible upside, research analysts plainly believe Pennsylvania Real Estate Investment Trust is more favorable than Rouse Properties.

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.1%. Rouse Properties does not pay a dividend. Pennsylvania Real Estate Investment Trust pays out -182.6% of its earnings in the form of a dividend. Pennsylvania Real Estate Investment Trust has increased its dividend for 5 consecutive years and Rouse Properties has increased its dividend for 4 consecutive years.

Valuation & Earnings

This table compares Pennsylvania Real Estate Investment Trust and Rouse Properties’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $399.31 million 2.06 $220.88 million ($0.46) -25.63
Rouse Properties N/A N/A N/A N/A N/A

Pennsylvania Real Estate Investment Trust has higher revenue and earnings than Rouse Properties.

Insider and Institutional Ownership

93.9% of Pennsylvania Real Estate Investment Trust shares are owned by institutional investors. 4.4% of Pennsylvania Real Estate Investment Trust shares are owned 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.

Profitability

This table compares Pennsylvania Real Estate Investment Trust and Rouse Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -3.49% -1.78% -0.52%
Rouse Properties -12.34% -9.28% -1.58%

Summary

Pennsylvania Real Estate Investment Trust beats Rouse Properties on 11 of the 11 factors compared between the two stocks.

Pennsylvania Real Estate Investment Trust Company Profile

Pennsylvania Real Estate Investment Trust (PREIT) is a self-managed and self-administered real estate investment trust (REIT). The Company’s primary business is owning and operating retail shopping malls, which it does primarily through operating partnership, PREIT Associates, L.P. (PREIT Associates). The Company is engaged in the ownership, management, leasing, acquisition, redevelopment, development and disposition of shopping malls. The Company has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of December 31, 2016, the Company owned interests in 30 retail properties, of which 26 are operating properties and four are development or redevelopment properties. As of December 31, 2016, the Company’s 26 operating properties included 22 shopping malls and four other retail properties, had a total of 21.7 million square feet and were located in nine states.

Rouse Properties Company Profile

Rouse Properties, Inc. is a United States-based real estate investment company. The Company owns and manages regional malls in protected markets or submarkets in the United States. The Company operates through the retail segment, which includes the operation, development and management of regional malls. The Company’s portfolio includes approximately 40 malls and retail centers in over 20 states totaling approximately 24.9 million square feet of retail space. The Company’s properties include Animas Valley Mall; Bayshore Mall; Birchwood Mall; Cache Valley Mall; Chesterfield Towne Center; Chula Vista Center; Colony Square Mall; Fig Garden Village; Grand Traverse Mall; Greenville Mall; Lakeland Square; Lansing Mall; Mall St. Vincent; NewPark Mall; North Plains Mall; Pierre Bossier Mall; Sikes Senter; Silver Lake Mall; Southland Center; Southland Mall; Spring Hill Mall; Valley Hills Mall; Vista Ridge Mall; Washington Park Mall; West Valley Mall; Westwood Mall, and White Mountain Mall.

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