Retail Opportunity Investments (ROIC) vs. Rouse Properties (RSE) Financial Survey

Rouse Properties (NYSE: RSE) and Retail Opportunity Investments (NASDAQ:ROIC) are both small-cap financials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Rouse Properties and Retail Opportunity Investments, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rouse Properties 0 0 0 0 N/A
Retail Opportunity Investments 0 4 3 0 2.43

Retail Opportunity Investments has a consensus target price of $22.17, suggesting a potential upside of 25.59%. Given Retail Opportunity Investments’ higher probable upside, analysts clearly believe Retail Opportunity Investments is more favorable than Rouse Properties.

Institutional and Insider Ownership

97.4% of Retail Opportunity Investments shares are owned by institutional investors. 2.2% of Retail Opportunity Investments shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Rouse Properties pays an annual dividend of $0.54 per share and has a dividend yield of 3.0%. Retail Opportunity Investments pays an annual dividend of $0.75 per share and has a dividend yield of 4.2%. Rouse Properties pays out -207.7% of its earnings in the form of a dividend. Retail Opportunity Investments pays out 220.6% 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 Opportunity Investments has increased its dividend for 5 consecutive years. Retail Opportunity Investments is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Rouse Properties and Retail Opportunity Investments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rouse Properties -12.34% -9.28% -1.58%
Retail Opportunity Investments 14.13% 2.86% 1.34%

Valuation & Earnings

This table compares Rouse Properties and Retail Opportunity Investments’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rouse Properties N/A N/A N/A ($0.26) -70.27
Retail Opportunity Investments $237.19 million 8.17 $32.48 million $0.34 51.91

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

Summary

Retail Opportunity Investments beats Rouse Properties on 12 of the 13 factors compared between the two stocks.

Rouse Properties Company Profile

Rouse Properties, Inc. is a United States-based real estate investment company. The Company owns and manages regional malls in protected markets or submarkets in the United States. The Company operates through the retail segment, which includes the operation, development and management of regional malls. The Company’s portfolio includes approximately 40 malls and retail centers in over 20 states totaling approximately 24.9 million square feet of retail space. The Company’s properties include Animas Valley Mall; Bayshore Mall; Birchwood Mall; Cache Valley Mall; Chesterfield Towne Center; Chula Vista Center; Colony Square Mall; Fig Garden Village; Grand Traverse Mall; Greenville Mall; Lakeland Square; Lansing Mall; Mall St. Vincent; NewPark Mall; North Plains Mall; Pierre Bossier Mall; Sikes Senter; Silver Lake Mall; Southland Center; Southland Mall; Spring Hill Mall; Valley Hills Mall; Vista Ridge Mall; Washington Park Mall; West Valley Mall; Westwood Mall, and White Mountain Mall.

Retail Opportunity Investments Company Profile

Retail Opportunity Investments Corp. (ROIC) is a fully integrated, self-managed real estate investment trust (REIT). The Company specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United States, anchored by supermarkets and drugstores. Retail Opportunity Investments Partnership, LP is the operating partnership of the Company. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business. As of September 30, 2017, the Company’s portfolio consisted of 87 properties totaling approximately 10.0 million square feet of gross leasable area (GLA). As of September 30, 2017, the Company’s portfolio was approximately 97.3% leased.

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