Reviewing DDR Corp. (DDR) and Saul Centers (BFS)
DDR Corp. (NYSE: DDR) and Saul Centers (NYSE:BFS) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.
Insider and Institutional Ownership
80.2% of DDR Corp. shares are held by institutional investors. Comparatively, 45.2% of Saul Centers shares are held by institutional investors. 16.1% of DDR Corp. shares are held by company insiders. Comparatively, 48.8% of Saul Centers shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares DDR Corp. and Saul Centers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares DDR Corp. and Saul Centers’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|DDR Corp.||$963.85 million||3.47||$622.40 million||($0.20)||-45.55|
|Saul Centers||$221.81 million||6.23||$144.68 million||$1.58||40.15|
DDR Corp. has higher revenue and earnings than Saul Centers. DDR Corp. is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.
DDR Corp. pays an annual dividend of $0.76 per share and has a dividend yield of 8.3%. Saul Centers pays an annual dividend of $2.04 per share and has a dividend yield of 3.2%. DDR Corp. pays out -380.0% of its earnings in the form of a dividend. Saul Centers pays out 129.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DDR Corp. has increased its dividend for 3 consecutive years and Saul Centers has increased its dividend for 6 consecutive years. DDR Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
DDR Corp. has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.
This is a summary of recent ratings for DDR Corp. and Saul Centers, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
DDR Corp. currently has a consensus price target of $13.50, indicating a potential upside of 48.19%. Saul Centers has a consensus price target of $72.00, indicating a potential upside of 13.51%. Given DDR Corp.’s higher probable upside, research analysts clearly believe DDR Corp. is more favorable than Saul Centers.
DDR Corp. Company Profile
DDR Corp. is a self-administered and self-managed real estate investment trust. It operates through two segments: shopping centers and loan investments. It is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers. As of December 31, 2016, it owned and managed approximately 106 million total square feet of gross leasable area (GLA). As of December 31, 2016, the portfolio properties included 319 shopping centers (including 152 centers owned through joint ventures). As of December 31, 2016, the portfolio properties also included over 650 acres of undeveloped land, including parcels located adjacent to certain of the shopping centers. As of December 31, 2016, the portfolio properties aggregated to 75.8 million square feet of Company-owned GLA located in 35 states, plus Puerto Rico. These centers are in the Southeast and Midwest, with significant concentrations in Florida, Georgia, Ohio and North Carolina, as well as Puerto Rico.
Saul Centers Company Profile
Saul Centers, Inc. operates as a real estate investment trust. The Company’s principal business activity is the ownership, management and development of income-producing properties. It operates through two segments: Shopping Centers and Mixed-Use Properties. The Company, which conducts all of its activities through its subsidiaries, the Saul Holdings Limited Partnership (Operating Partnership) and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-used properties in the Washington, District of Columbia/Baltimore metropolitan area. As of December 31, 2016, it properties (the Current Portfolio Properties) consisted of 49 shopping center properties (the Shopping Centers), six mixed-use properties, which consists of office, retail and multi-family residential uses (the Mixed-Use Properties) and three (non-operating) development properties.
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