Retail Properties of America (NYSE: RPAI) and Ramco-Gershenson Properties Trust (NYSE:RPT) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current ratings for Retail Properties of America and Ramco-Gershenson Properties Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Retail Properties of America 0 1 5 0 2.83
Ramco-Gershenson Properties Trust 1 5 4 0 2.30

Retail Properties of America currently has a consensus price target of $16.08, suggesting a potential upside of 29.91%. Ramco-Gershenson Properties Trust has a consensus price target of $14.86, suggesting a potential upside of 8.05%. Given Retail Properties of America’s stronger consensus rating and higher probable upside, equities analysts plainly believe Retail Properties of America is more favorable than Ramco-Gershenson Properties Trust.

Volatility & Risk

Retail Properties of America has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Ramco-Gershenson Properties Trust has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Profitability

This table compares Retail Properties of America and Ramco-Gershenson Properties Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Retail Properties of America 28.84% 7.61% 3.71%
Ramco-Gershenson Properties Trust 20.75% 6.96% 2.55%

Insider & Institutional Ownership

79.1% of Retail Properties of America shares are owned by institutional investors. 0.4% of Retail Properties of America shares are owned by company insiders. Comparatively, 1.6% of Ramco-Gershenson Properties Trust shares are owned by company 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.

Dividends

Retail Properties of America pays an annual dividend of $0.66 per share and has a dividend yield of 5.3%. Ramco-Gershenson Properties Trust pays an annual dividend of $0.88 per share and has a dividend yield of 6.4%. Retail Properties of America pays out 101.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ramco-Gershenson Properties Trust pays out 149.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Properties of America has raised its dividend for 5 consecutive years.

Valuation and Earnings

This table compares Retail Properties of America and Ramco-Gershenson Properties Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Retail Properties of America $583.14 million 4.82 $166.81 million $0.65 19.05
Ramco-Gershenson Properties Trust $260.93 million 4.18 $59.66 million $0.59 23.31

Retail Properties of America has higher revenue and earnings than Ramco-Gershenson Properties Trust. Retail Properties of America is trading at a lower price-to-earnings ratio than Ramco-Gershenson Properties Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Retail Properties of America beats Ramco-Gershenson Properties Trust on 13 of the 17 factors compared between the two stocks.

Retail Properties of America Company Profile

Retail Properties of America, Inc. is a real estate investment trust (REIT). The Company owns and operates shopping centers located in the United States. As of December 31, 2016, it owned 156 retail operating properties representing 25,832,000 square feet of gross leasable area (GLA). Its retail operating portfolio includes neighborhood and community centers, power centers, and lifestyle centers and multi-tenant retail-focused mixed-use properties, as well as single-user retail properties. As of December 31, 2016, it had identified 10 target markets, including Dallas, Washington, District of Columbia/Baltimore, New York, Atlanta, Seattle, Chicago, Houston, San Antonio, Phoenix and Austin. Its properties include 23rd Street Plaza, Azalea Square I, Boulevard Plaza, Brown’s Lane, Cranberry Square, Denton Crossing, Dorman Center I & II, Edgemont Town Center, Edwards Multiplex, Green’s Corner, Home Depot Plaza, Lake Mary Pointe, Lincoln Park, University Town Center and Winchester Commons.

Ramco-Gershenson Properties Trust Company Profile

Ramco-Gershenson Properties Trust is an equity real estate investment trust. The Company’s primary business is the ownership, management, redevelopment, development and operation of retail shopping centers. As of December 31, 2016, it owned and managed multi-anchored shopping centers in 12 metropolitan markets in the United States. It conducts its business through its operating partnership, Ramco-Gershenson Properties, L.P. It invests in large, multi-anchored shopping centers that include national chain store tenants and supermarket tenants. National chain anchor tenants in its centers include, among others, Bed Bath and Beyond, Dick’s Sporting Goods, and Home Depot. Supermarket anchor tenants in its centers include, among others, Publix Super Market, Whole Foods, Kroger and Sprouts. Its shopping centers are located in metropolitan markets, such as Metro Detroit, Southeast Florida, Greater Denver, Cincinnati, St. Louis, Jacksonville, Tampa/Lakeland, Milwaukee, Chicago and Atlanta.

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