Realty Income Corporation (NYSE: O) and CBL & Associates Properties (NYSE:CBL) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Institutional & Insider Ownership

69.0% of Realty Income Corporation shares are owned by institutional investors. Comparatively, 89.5% of CBL & Associates Properties shares are owned by institutional investors. 0.3% of Realty Income Corporation shares are owned by insiders. Comparatively, 11.7% of CBL & Associates Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Realty Income Corporation and CBL & Associates Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Realty Income Corporation 29.19% 5.14% 2.62%
CBL & Associates Properties 14.88% 9.43% 2.05%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Realty Income Corporation and CBL & Associates Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Realty Income Corporation 2 4 3 0 2.11
CBL & Associates Properties 1 5 2 0 2.13

Realty Income Corporation currently has a consensus price target of $66.00, suggesting a potential upside of 13.13%. CBL & Associates Properties has a consensus price target of $10.46, suggesting a potential upside of 27.85%. Given CBL & Associates Properties’ stronger consensus rating and higher possible upside, analysts plainly believe CBL & Associates Properties is more favorable than Realty Income Corporation.

Risk and Volatility

Realty Income Corporation has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, CBL & Associates Properties has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Dividends

Realty Income Corporation pays an annual dividend of $2.54 per share and has a dividend yield of 4.4%. CBL & Associates Properties pays an annual dividend of $1.06 per share and has a dividend yield of 13.0%. Realty Income Corporation pays out 217.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CBL & Associates Properties pays out 179.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CBL & Associates Properties has raised its dividend for 21 consecutive years. CBL & Associates Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Realty Income Corporation and CBL & Associates Properties’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Realty Income Corporation $1.16 billion 13.78 $1.05 billion $1.17 49.86
CBL & Associates Properties $977.46 million 1.43 $637.66 million $0.59 13.86

Realty Income Corporation has higher revenue and earnings than CBL & Associates Properties. CBL & Associates Properties is trading at a lower price-to-earnings ratio than Realty Income Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

CBL & Associates Properties beats Realty Income Corporation on 9 of the 17 factors compared between the two stocks.

Realty Income Corporation Company Profile

Realty Income Corporation is a real estate investment trust (REIT). The Company is engaged in in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities. As of December 31, 2016, the Company owned a diversified portfolio of 4,944 properties located in 49 states and Puerto Rico, with over 83.0 million square feet of leasable space leased to 248 different commercial tenants doing business in 47 separate industries. As of December 31, 2016, of the 4,944 properties in the portfolio, 4,920, or 99.5%, were single-tenant properties, and the remaining were multi-tenant properties. As of December 31, 2016, of the 4,920 single-tenant properties, 4,836 were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.8 years.

CBL & Associates Properties Company Profile

CBL & Associates Properties, Inc. is a self-managed, self-administered, integrated real estate investment trust. The Company owns, develops, acquires, leases, manages and operates regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers and office properties. Its segments are Malls, Associated Centers, Community Centers and All Other. As of December 31, 2016, the Company owned a controlling interest in 65 Malls and non-controlling interests in nine Malls. As of December 31, 2016, the Company owned a controlling interest in 20 Associated Centers and a non-controlling interest in three Associated Centers. As of December 31, 2016, the Company owned a controlling interest in four Community Centers and a non-controlling interest in five Community Centers. As of December 31, 2016, the Company’s properties were located in 27 states, primarily in the southeastern and mid-western United States.

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