Regency Centers Corporation (NYSE: REG) and Pennsylvania Real Estate Investment Trust (NYSE:PEI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

91.5% of Regency Centers Corporation shares are held by institutional investors. Comparatively, 99.3% of Pennsylvania Real Estate Investment Trust shares are held by institutional investors. 12.7% of Regency Centers Corporation shares are held by company insiders. Comparatively, 4.4% of Pennsylvania Real Estate Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Regency Centers Corporation has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Pennsylvania Real Estate Investment Trust has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.

Dividends

Regency Centers Corporation pays an annual dividend of $2.12 per share and has a dividend yield of 3.2%. Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.9%. Regency Centers Corporation pays out 353.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennsylvania Real Estate Investment Trust pays out -64.1% of its earnings in the form of a dividend. Regency Centers Corporation has raised its dividend for 5 consecutive years and Pennsylvania Real Estate Investment Trust has raised its dividend for 3 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Regency Centers Corporation and Pennsylvania Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regency Centers Corporation 13.19% 2.20% 1.26%
Pennsylvania Real Estate Investment Trust -18.13% -9.06% -2.66%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Regency Centers Corporation and Pennsylvania Real Estate Investment Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regency Centers Corporation 1 4 5 1 2.55
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86

Regency Centers Corporation presently has a consensus target price of $72.15, suggesting a potential upside of 10.30%. Pennsylvania Real Estate Investment Trust has a consensus target price of $14.08, suggesting a potential upside of 32.30%. Given Pennsylvania Real Estate Investment Trust’s higher possible upside, analysts plainly believe Pennsylvania Real Estate Investment Trust is more favorable than Regency Centers Corporation.

Valuation & Earnings

This table compares Regency Centers Corporation and Pennsylvania Real Estate Investment Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Regency Centers Corporation $798.89 million 13.90 $508.87 million $0.60 109.02
Pennsylvania Real Estate Investment Trust $392.34 million 1.89 $217.76 million ($1.31) -8.13

Regency Centers Corporation has higher revenue and earnings than Pennsylvania Real Estate Investment Trust. Pennsylvania Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Regency Centers Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Regency Centers Corporation beats Pennsylvania Real Estate Investment Trust on 12 of the 17 factors compared between the two stocks.

Regency Centers Corporation Company Profile

Regency Centers Corporation is a real estate investment trust (REIT). The Company is the general partner of Regency Centers, L.P. (the Operating Partnership). The Company is engaged in the ownership, management, leasing, acquisition and development of retail shopping centers through the Operating Partnership. The Company’s properties include Palm Valley Marketplace, Shops at Arizona, Amerige Heights Town Center, Clayton Valley Shopping Center, Five Points Shopping Center, French Valley Village Center, Hasley Canyon Village, Pleasant Hill Shopping Center, Snell & Branham Plaza, Applewood Shopping Center, Kent Place, Black Rock, Spring Valley Shopping Center and Pebblebrook Plaza. As of December 31, 2016, the Company owned all of the Preferred Units of the Operating Partnership and approximately 99.9% of the Units in the Operating Partnership. As of December 31, 2016, it owned direct or partial interests in 307 shopping centers.

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.

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