Analyzing DDR (DDR) & Getty Realty (GTY)

Getty Realty (NYSE: GTY) and DDR (NYSE:DDR) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Institutional & Insider Ownership

62.8% of Getty Realty shares are owned by institutional investors. Comparatively, 78.9% of DDR shares are owned by institutional investors. 22.3% of Getty Realty shares are owned by company insiders. Comparatively, 16.1% of DDR shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Getty Realty and DDR, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Getty Realty 1 0 2 0 2.33
DDR 1 9 6 0 2.31

Getty Realty currently has a consensus target price of $27.33, suggesting a potential upside of 14.99%. DDR has a consensus target price of $11.13, suggesting a potential upside of 54.30%. Given DDR’s higher possible upside, analysts clearly believe DDR is more favorable than Getty Realty.

Profitability

This table compares Getty Realty and DDR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Getty Realty 36.66% 9.62% 4.89%
DDR 1.11% 3.48% 1.20%

Dividends

Getty Realty pays an annual dividend of $1.28 per share and has a dividend yield of 5.4%. DDR pays an annual dividend of $0.76 per share and has a dividend yield of 10.5%. Getty Realty pays out 107.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DDR pays out -1,900.0% of its earnings in the form of a dividend. Getty Realty has raised its dividend for 7 consecutive years and DDR has raised its dividend for 5 consecutive years. DDR is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Getty Realty and DDR’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Getty Realty $115.27 million 8.17 $38.41 million $1.19 19.97
DDR $969.51 million 2.74 $60.01 million ($0.04) -180.25

DDR has higher revenue and earnings than Getty Realty. DDR is trading at a lower price-to-earnings ratio than Getty Realty, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Getty Realty has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, DDR has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Summary

Getty Realty beats DDR on 9 of the 17 factors compared between the two stocks.

About Getty Realty

Getty Realty Corp. is a real estate investment trust (REIT). The Company specializes in the ownership, leasing and financing of convenience store and gasoline station properties. As of June 30, 2017, the Company’s 825 properties were located in 26 states across the United States and Washington, District of Columbia. Its properties are operated under a range of brands, including 76, Aloha, BP, Citgo, Conoco, Exxon, Getty, Mobil, RaceTrac, Shell and Valero. The Company owns the Getty name in connection with its real estate and the petroleum marketing business in the United States. As of June 30, 2017, the Company had owned 738 properties and leased 87 properties from third-party landlords. Its typical property is used as a convenience store and gasoline station. Its properties are concentrated in the Northeast and Mid-Atlantic regions.

About DDR

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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