Taubman Centers (NYSE: TCO) and American Assets Trust (NYSE:AAT) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.

Risk & Volatility

Taubman Centers has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, American Assets Trust has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Earnings & Valuation

This table compares Taubman Centers and American Assets Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Taubman Centers $606.47 million 5.51 $311.97 million $1.29 42.65
American Assets Trust $298.95 million 6.41 $168.82 million $0.66 61.62

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Taubman Centers and American Assets Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taubman Centers 0 6 3 0 2.33
American Assets Trust 0 1 1 0 2.50

Taubman Centers currently has a consensus target price of $73.67, suggesting a potential upside of 33.89%. American Assets Trust has a consensus target price of $47.00, suggesting a potential upside of 15.56%. Given Taubman Centers’ higher possible upside, research analysts clearly believe Taubman Centers is more favorable than American Assets Trust.

Profitability

This table compares Taubman Centers and American Assets Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Taubman Centers 14.71% -110.46% 2.25%
American Assets Trust 10.93% 3.94% 1.61%

Institutional and Insider Ownership

98.4% of Taubman Centers shares are owned by institutional investors. Comparatively, 99.4% of American Assets Trust shares are owned by institutional investors. 31.2% of Taubman Centers shares are owned by company insiders. Comparatively, 34.2% of American Assets Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Taubman Centers pays an annual dividend of $2.50 per share and has a dividend yield of 4.5%. American Assets Trust pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Taubman Centers pays out 193.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. American Assets Trust has raised its dividend for 7 consecutive years.

Summary

American Assets Trust beats Taubman Centers on 9 of the 17 factors compared between the two stocks.

About Taubman Centers

Taubman Centers, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company’s segment is focused on owning, developing and managing regional shopping centers. The Taubman Realty Group Limited Partnership (the Operating Partnership or TRG) is majority-owned partnership subsidiary of the Company that owns direct or indirect interests in all of its real estate properties. The Company owns, leases, acquires, disposes of, develops, expands and manages regional and super-regional shopping centers and interests therein. Its owned portfolio of operating centers as of December 31, 2016 consisted of 23 urban and suburban shopping centers operating in 11 the United States states, Puerto Rico, South Korea, and China. The consolidated businesses consist of shopping centers and entities that are controlled by ownership or contractual agreements, The Taubman Company LLC (Manager), and Taubman Properties Asia LLC and its subsidiaries (Taubman Asia).

About American Assets Trust

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.

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