National Retail Properties (NYSE: NNN) and Rouse Properties (NYSE:RSE) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for National Retail Properties and Rouse Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Retail Properties 0 2 4 0 2.67
Rouse Properties 0 0 0 0 N/A

National Retail Properties presently has a consensus target price of $48.20, indicating a potential upside of 12.99%. Given National Retail Properties’ higher probable upside, research analysts clearly believe National Retail Properties is more favorable than Rouse Properties.

Profitability

This table compares National Retail Properties and Rouse Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Retail Properties 44.17% 8.22% 4.03%
Rouse Properties -12.34% -9.28% -1.58%

Insider and Institutional Ownership

89.4% of National Retail Properties shares are owned by institutional investors. 1.0% of National Retail Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares National Retail Properties and Rouse Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
National Retail Properties $562.72 million 11.31 $500.46 million $1.33 32.08
Rouse Properties N/A N/A N/A N/A N/A

National Retail Properties has higher revenue and earnings than Rouse Properties.

Risk and Volatility

National Retail Properties has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Rouse Properties has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Dividends

National Retail Properties pays an annual dividend of $1.90 per share and has a dividend yield of 4.5%. Rouse Properties does not pay a dividend. National Retail Properties pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Retail Properties has increased its dividend for 7 consecutive years and Rouse Properties has increased its dividend for 4 consecutive years.

Summary

National Retail Properties beats Rouse Properties on 10 of the 12 factors compared between the two stocks.

National Retail Properties Company Profile

National Retail Properties, Inc. is a real estate investment trust (REIT). The Company acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment. As of December 31, 2016, it owned 2,535 properties with an aggregate gross leasable area of approximately 27,204,000 square feet, located in 48 states. The Company focuses on investing in a range of property and tenant types; leases, mortgages and other types of real estate interests; loans secured by personal property; loans secured by partnership or membership interests in partnerships or limited liability companies, and securities of other REITs, or other issuers, including for the purpose of exercising control over such entities. The Company owns a portfolio of freestanding retail stores across the United States. It owns approximately 2,290 stores, which are leased to over 400 tenants in approximately 40 different retail categories.

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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