Simon Property Group (NYSE: SPG) and Macerich Company (The) (NYSE:MAC) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Profitability

This table compares Simon Property Group and Macerich Company (The)’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%
Macerich Company (The) 14.92% 3.56% 1.55%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Simon Property Group and Macerich Company (The), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simon Property Group 0 5 10 0 2.67
Macerich Company (The) 1 8 5 0 2.29

Simon Property Group presently has a consensus target price of $192.33, indicating a potential upside of 21.48%. Macerich Company (The) has a consensus target price of $66.71, indicating a potential upside of 3.80%. Given Simon Property Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Simon Property Group is more favorable than Macerich Company (The).

Dividends

Simon Property Group pays an annual dividend of $7.40 per share and has a dividend yield of 4.7%. Macerich Company (The) pays an annual dividend of $2.96 per share and has a dividend yield of 4.6%. Simon Property Group pays out 130.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Macerich Company (The) pays out 281.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simon Property Group has raised its dividend for 7 consecutive years and Macerich Company (The) has raised its dividend for 6 consecutive years. Simon Property Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Simon Property Group and Macerich Company (The)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Simon Property Group $5.44 billion 18.64 $1.84 billion $5.67 27.92
Macerich Company (The) $1.04 billion 8.69 $516.99 million $1.05 61.21

Simon Property Group has higher revenue and earnings than Macerich Company (The). Simon Property Group is trading at a lower price-to-earnings ratio than Macerich Company (The), indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Simon Property Group has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Macerich Company (The) has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

95.2% of Simon Property Group shares are owned by institutional investors. Comparatively, 97.8% of Macerich Company (The) shares are owned by institutional investors. 8.4% of Simon Property Group shares are owned by insiders. Comparatively, 3.8% of Macerich Company (The) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Simon Property Group beats Macerich Company (The) on 14 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 Macerich Company (The)

The Macerich Company is a self-administered and self-managed real estate investment trust (REIT). The Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company owns ownership interests in, The Macerich Partnership, L.P. (the Operating Partnership). As of December 31, 2016, the Company, through its operating partnership, had ownership interests in 50 regional shopping centers and seven community/power shopping centers. These 57 regional and community/power shopping centers consisted of approximately 56 million square feet of gross leasable area (GLA), as of December 31, 2016. The Company’s properties include Danbury Fair Mall, Desert Sky Mall, Fresno Fashion Fair, NorthPark Mall, Oaks, The, Towne Mall, Valley Mall, Arrowhead Towne Center, Deptford Mall and South Plains Mall.

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