Critical Comparison: Simon Property Group (SPG) versus DDR Corp. (DDR)
Simon Property Group (NYSE: SPG) and DDR Corp. (NYSE:DDR) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.
Earnings and Valuation
This table compares Simon Property Group and DDR Corp.’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Simon Property Group||$5.44 billion||18.87||$1.84 billion||$5.67||28.27|
|DDR Corp.||$969.51 million||3.01||$60.01 million||($0.04)||-198.00|
Insider and Institutional Ownership
95.2% of Simon Property Group shares are owned by institutional investors. Comparatively, 80.1% of DDR Corp. shares are owned by institutional investors. 8.4% of Simon Property Group shares are owned by insiders. Comparatively, 16.1% of DDR Corp. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Simon Property Group has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, DDR Corp. has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.
This table compares Simon Property Group and DDR Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Simon Property Group||31.96%||41.85%||6.09%|
This is a breakdown of current ratings for Simon Property Group and DDR Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Simon Property Group||0||5||10||0||2.67|
Simon Property Group currently has a consensus price target of $192.33, suggesting a potential upside of 19.98%. DDR Corp. has a consensus price target of $12.09, suggesting a potential upside of 52.66%. Given DDR Corp.’s higher probable upside, analysts plainly believe DDR Corp. is more favorable than Simon Property Group.
Simon Property Group pays an annual dividend of $7.20 per share and has a dividend yield of 4.5%. DDR Corp. pays an annual dividend of $0.76 per share and has a dividend yield of 9.6%. Simon Property Group pays out 127.0% 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. pays out -1,900.0% of its earnings in the form of a dividend. Simon Property Group has increased its dividend for 7 consecutive years and DDR Corp. has increased its dividend for 6 consecutive years. DDR Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Simon Property Group beats DDR Corp. on 12 of the 17 factors compared between the two stocks.
About Simon Property Group
Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. Simon Property Group, L.P. (Operating Partnership), is the Company’s partnership subsidiary that owns all of its real estate properties and other assets. As of December 31, 2016, the Company owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 Premium Outlets, 14 Mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. As of December 31, 2016, it had redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at 27 properties in the United States and it had one outlet and one other retail project under development.
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.
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