American Assets Trust (NYSE: AAT) and Retail Opportunity Investments Corp. (NASDAQ:ROIC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Valuation & Earnings

This table compares American Assets Trust and Retail Opportunity Investments Corp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Assets Trust $298.95 million 6.27 $168.82 million $0.66 60.26
Retail Opportunity Investments Corp. $254.96 million 8.62 $162.92 million $0.33 60.70

American Assets Trust has higher revenue and earnings than Retail Opportunity Investments Corp.. American Assets Trust 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for American Assets Trust and Retail Opportunity Investments Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Assets Trust 0 1 1 0 2.50
Retail Opportunity Investments Corp. 0 3 3 0 2.50

American Assets Trust presently has a consensus price target of $47.00, suggesting a potential upside of 18.18%. Retail Opportunity Investments Corp. has a consensus price target of $23.50, suggesting a potential upside of 17.32%. Given American Assets Trust’s higher probable upside, equities research analysts plainly believe American Assets Trust is more favorable than Retail Opportunity Investments Corp..

Dividends

American Assets Trust pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Retail Opportunity Investments Corp. pays an annual dividend of $0.75 per share and has a dividend yield of 3.7%. American Assets Trust pays out 157.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Profitability

This table compares American Assets Trust and Retail Opportunity Investments Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Assets Trust 10.93% 3.94% 1.61%
Retail Opportunity Investments Corp. 13.92% 2.71% 1.31%

Volatility & Risk

American Assets Trust has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Retail Opportunity Investments Corp. has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Insider & Institutional Ownership

99.8% of American Assets Trust shares are held by institutional investors. Comparatively, 96.6% of Retail Opportunity Investments Corp. shares are held by institutional investors. 34.2% of American Assets Trust 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, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

American Assets Trust beats Retail Opportunity Investments Corp. on 10 of the 15 factors compared between the two stocks.

American Assets Trust Company Profile

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust (REIT). The Company owns, operates, acquires and develops retail, office, multifamily and mixed-use properties in Southern California, Northern California, Oregon, Washington, Texas and Hawaii markets. The Company operates in four business segments: retail, office, multifamily and mixed-use. As of December 31, 2016, the Company’s portfolio consisted of 11 retail shopping centers; seven office properties; a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center, and five multifamily properties. Additionally, as of December 31, 2016, the Company owned land at four of its properties that it classified as held for development and construction in progress. The Company’s markets include San Diego, the San Francisco Bay Area, Portland, Oregon, Bellevue, Washington and Oahu, Hawaii.

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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