Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Urban Edge Properties (NYSE:UE) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Insider & Institutional Ownership

99.0% of Pennsylvania Real Estate Investment Trust shares are held by institutional investors. Comparatively, 87.3% of Urban Edge Properties shares are held by institutional investors. 4.4% of Pennsylvania Real Estate Investment Trust shares are held by insiders. Comparatively, 4.7% of Urban Edge Properties 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 Pennsylvania Real Estate Investment Trust and Urban Edge Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -18.13% -9.06% -2.66%
Urban Edge Properties 27.04% 16.72% 4.87%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Pennsylvania Real Estate Investment Trust and Urban Edge Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86
Urban Edge Properties 1 0 0 0 1.00

Pennsylvania Real Estate Investment Trust currently has a consensus price target of $13.92, suggesting a potential upside of 43.18%. Urban Edge Properties has a consensus price target of $25.00, suggesting a potential upside of 6.56%. Given Pennsylvania Real Estate Investment Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Pennsylvania Real Estate Investment Trust is more favorable than Urban Edge Properties.

Earnings & Valuation

This table compares Pennsylvania Real Estate Investment Trust and Urban Edge Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $392.34 million 1.73 $217.76 million ($1.31) -7.42
Urban Edge Properties $379.02 million 6.66 $230.14 million $1.01 23.23

Urban Edge Properties has higher revenue, but lower earnings than Pennsylvania Real Estate Investment Trust. Pennsylvania Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Urban Edge Properties, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Pennsylvania Real Estate Investment Trust has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Urban Edge Properties has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 8.6%. Urban Edge Properties pays an annual dividend of $0.88 per share and has a dividend yield of 3.8%. Pennsylvania Real Estate Investment Trust pays out -64.1% of its earnings in the form of a dividend. Urban Edge Properties pays out 87.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Urban Edge Properties has raised its dividend for 5 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Urban Edge Properties beats Pennsylvania Real Estate Investment Trust on 9 of the 16 factors compared between the two stocks.

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust (PREIT) is a self-managed and self-administered real estate investment trust (REIT). The Company’s primary business is owning and operating retail shopping malls, which it does primarily through operating partnership, PREIT Associates, L.P. (PREIT Associates). The Company is engaged in the ownership, management, leasing, acquisition, redevelopment, development and disposition of shopping malls. The Company has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of December 31, 2016, the Company owned interests in 30 retail properties, of which 26 are operating properties and four are development or redevelopment properties. As of December 31, 2016, the Company’s 26 operating properties included 22 shopping malls and four other retail properties, had a total of 21.7 million square feet and were located in nine states.

About Urban Edge Properties

Urban Edge Properties is a real estate investment trust. The Company is focused on managing, developing, redeveloping and acquiring retail real estate in urban communities, in the New York metropolitan region. Urban Edge Properties LP (UELP or the Operating Partnership) serves as its partnership subsidiary and owns, through affiliates, all of its real estate properties and other assets. As of December 31, 2016, its portfolio consisted of 79 shopping centers, three malls and a warehouse park adjacent to one of its centers totaling 14.8 million square feet. As of December 31, 2016, it leased 19 properties under ground and/or building leases. As of December 31, 2016, it had approximately 1,200 leases. Its shopping centers and malls are located at California, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, South Carolina, Virginia and Puerto Rico. Its shopping centers and malls include Signal Hill, Vallejo, Walnut Creek, Newington and others.

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