Tanger Factory Outlet Centers (NYSE: SKT) and Acadia Realty Trust (NYSE:AKR) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Dividends

Tanger Factory Outlet Centers pays an annual dividend of $1.37 per share and has a dividend yield of 5.9%. Acadia Realty Trust pays an annual dividend of $1.04 per share and has a dividend yield of 3.6%. 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. Acadia Realty Trust pays out 162.5% 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 has raised its dividend for 24 consecutive years and Acadia Realty Trust has raised its dividend for 4 consecutive years. Tanger Factory Outlet Centers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

95.7% of Tanger Factory Outlet Centers shares are held by institutional investors. 4.8% of Tanger Factory Outlet Centers shares are held by insiders. Comparatively, 1.7% of Acadia Realty Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Tanger Factory Outlet Centers and Acadia Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tanger Factory Outlet Centers 29.65% 20.75% 5.66%
Acadia Realty Trust 23.63% 2.50% 1.37%

Valuation and Earnings

This table compares Tanger Factory Outlet Centers and Acadia Realty Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tanger Factory Outlet Centers $493.28 million 4.44 $276.68 million $1.51 15.27
Acadia Realty Trust $251.17 million 9.51 $140.01 million $0.64 44.61

Tanger Factory Outlet Centers has higher revenue and earnings than Acadia Realty Trust. Tanger Factory Outlet Centers is trading at a lower price-to-earnings ratio than Acadia Realty Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Tanger Factory Outlet Centers and Acadia Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tanger Factory Outlet Centers 2 3 2 0 2.00
Acadia Realty Trust 0 1 3 0 2.75

Tanger Factory Outlet Centers currently has a consensus price target of $27.38, suggesting a potential upside of 18.71%. Acadia Realty Trust has a consensus price target of $33.50, suggesting a potential upside of 17.34%. Given Tanger Factory Outlet Centers’ higher possible upside, equities analysts plainly believe Tanger Factory Outlet Centers is more favorable than Acadia Realty Trust.

Risk & Volatility

Tanger Factory Outlet Centers has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Acadia Realty Trust has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Summary

Tanger Factory Outlet Centers beats Acadia Realty Trust on 12 of the 17 factors compared between the two stocks.

Tanger Factory Outlet Centers Company Profile

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.

Acadia Realty Trust Company Profile

Acadia Realty Trust is a real estate investment trust. The Company is focused on the ownership, acquisition, development and management of retail properties located in the United States. It operates through three segments: Core Portfolio, Funds and Structured Financing. Core Portfolio and Fund properties primarily consist of street and urban retail, and dense suburban shopping centers. Funds holds primarily retail real estate in which it co-invests with institutional investors. Structured Financing consists of earnings and expenses related to notes and mortgages receivable, which are held within the Core Portfolio or the Funds. As of December 31, 2016, it had ownership interests in 182 properties within its core portfolio. In the Core Portfolio segment, the Company owned an interest in a 311,000 square foot shopping center, a 28,000 square foot retail and an interest in an 87,000 square foot retail property, among others, as of December 31, 2016.

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