Contrasting DDR Corp. (DDR) and General Growth Properties (GGP)
DDR Corp. (NYSE: DDR) and General Growth Properties (NYSE:GGP) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.
Earnings and Valuation
This table compares DDR Corp. and General Growth Properties’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|DDR Corp.||$963.85 million||3.30||$622.40 million||($0.20)||-43.30|
|General Growth Properties||$2.51 billion||7.53||$1.76 billion||$1.19||18.03|
General Growth Properties has higher revenue and earnings than DDR Corp.. DDR Corp. is trading at a lower price-to-earnings ratio than General Growth Properties, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
80.0% of DDR Corp. shares are owned by institutional investors. Comparatively, 95.2% of General Growth Properties shares are owned by institutional investors. 16.1% of DDR Corp. shares are owned by insiders. Comparatively, 35.6% of General Growth Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares DDR Corp. and General Growth Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|General Growth Properties||50.01%||13.57%||5.07%|
DDR Corp. pays an annual dividend of $0.76 per share and has a dividend yield of 8.8%. General Growth Properties pays an annual dividend of $0.88 per share and has a dividend yield of 4.1%. DDR Corp. pays out -380.0% of its earnings in the form of a dividend. General Growth Properties pays out 73.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. DDR Corp. has increased its dividend for 5 consecutive years and General Growth Properties has increased its dividend for 6 consecutive years. DDR Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
DDR Corp. has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, General Growth Properties has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.
This is a summary of current recommendations and price targets for DDR Corp. and General Growth Properties, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General Growth Properties||1||5||4||0||2.30|
DDR Corp. currently has a consensus price target of $13.05, suggesting a potential upside of 50.64%. General Growth Properties has a consensus price target of $24.80, suggesting a potential upside of 15.62%. Given DDR Corp.’s higher possible upside, equities analysts clearly believe DDR Corp. is more favorable than General Growth Properties.
General Growth Properties beats DDR Corp. on 12 of the 16 factors compared between the two stocks.
About DDR Corp.
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.
About General Growth Properties
GGP Inc. (GGP), formerly General Growth Properties, Inc., is a self-administered and self-managed real estate investment trust (REIT). The Company operates as a holding company, which is engaged in the operation, development and management of retail and other rental properties, primarily regional malls. As of December 31, 2016, the Company owned, either entirely or with joint venture partners, 127 retail properties located throughout the United States comprising approximately 125 million square feet of gross leasable area (GLA). As of December 31, 2016, the Company’s retail properties included 200 Lafayette, The Shoppes at Buckland Hills, Northridge Fashion Center, Brass Mill Center, Jordan Creek Town Center, Westroads Mall and Stonestown Galleria. The Company’s business is conducted through GGP Operating Partnership, LP (GGPOP), GGP Nimbus, LP (GGPN) and GGP Limited Partnership (GGPLP, and together with GGPN and GGPOP, the Operating Partnerships), subsidiaries of GGP.
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