American Assets Trust (NYSE: AAT) and Tanger Factory Outlet Centers (NYSE:SKT) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Profitability

This table compares American Assets Trust and Tanger Factory Outlet Centers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Assets Trust 10.93% 3.94% 1.61%
Tanger Factory Outlet Centers 29.65% 20.75% 5.66%

Risk and Volatility

American Assets Trust has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Tanger Factory Outlet Centers has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Dividends

American Assets Trust pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Tanger Factory Outlet Centers pays an annual dividend of $1.37 per share and has a dividend yield of 5.5%. 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. Tanger Factory Outlet Centers pays out 90.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Assets Trust has raised its dividend for 24 consecutive years. Tanger Factory Outlet Centers is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for American Assets Trust and Tanger Factory Outlet Centers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Assets Trust 0 1 1 0 2.50
Tanger Factory Outlet Centers 2 4 2 0 2.00

American Assets Trust presently has a consensus target price of $47.00, indicating a potential upside of 15.62%. Tanger Factory Outlet Centers has a consensus target price of $29.90, indicating a potential upside of 19.98%. Given Tanger Factory Outlet Centers’ higher probable upside, analysts clearly believe Tanger Factory Outlet Centers is more favorable than American Assets Trust.

Earnings and Valuation

This table compares American Assets Trust and Tanger Factory Outlet Centers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Assets Trust $298.95 million 6.41 $168.82 million $0.66 61.59
Tanger Factory Outlet Centers $493.28 million 4.80 $276.68 million $1.51 16.50

Tanger Factory Outlet Centers has higher revenue and earnings than American Assets Trust. Tanger Factory Outlet 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.

Institutional & Insider Ownership

97.8% of American Assets Trust shares are held by institutional investors. Comparatively, 95.7% of Tanger Factory Outlet Centers shares are held by institutional investors. 34.2% of American Assets Trust shares are held by company insiders. Comparatively, 4.8% of Tanger Factory Outlet Centers shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Tanger Factory Outlet Centers beats American Assets Trust on 10 of the 17 factors compared between the two stocks.

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.

About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. is an owner and operator of outlet centers in the United States and Canada. The Company is a fully-integrated, self-administered and self-managed real estate investment trust (REIT), which focuses on developing, acquiring, owning, operating and managing outlet shopping centers. As of December 31, 2016, its portfolio consisted of 36 outlet centers, with a total gross leasable area of approximately 12.7 million square feet, which were 98% occupied and contained over 2,600 stores representing approximately 400 store brands. Its outlet centers and other assets are held by, and all of its operations are conducted by, Tanger Properties Limited Partnership and subsidiaries (Operating Partnership). The Company owns the majority of the units of partnership interest issued by the Operating Partnership, through its subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust controls the Operating Partnership as its sole general partner.

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