Analyzing Brixmor Property Group (BRX) & Pennsylvania Real Estate Investment Trust (PEI)

Brixmor Property Group (NYSE: BRX) and Pennsylvania Real Estate Investment Trust (NYSE:PEI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Profitability

This table compares Brixmor Property Group and Pennsylvania Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brixmor Property Group 25.14% 11.08% 3.48%
Pennsylvania Real Estate Investment Trust -16.35% -7.60% -2.34%

Dividends

Brixmor Property Group pays an annual dividend of $1.10 per share and has a dividend yield of 7.6%. Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 8.2%. Brixmor Property Group pays out 103.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennsylvania Real Estate Investment Trust pays out -67.7% of its earnings in the form of a dividend. Pennsylvania Real Estate Investment Trust has increased its dividend for 2 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for Brixmor Property Group and Pennsylvania Real Estate Investment Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brixmor Property Group 0 7 3 0 2.30
Pennsylvania Real Estate Investment Trust 2 5 0 0 1.71

Brixmor Property Group presently has a consensus target price of $19.75, suggesting a potential upside of 37.34%. Pennsylvania Real Estate Investment Trust has a consensus target price of $12.17, suggesting a potential upside of 19.28%. Given Brixmor Property Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Brixmor Property Group is more favorable than Pennsylvania Real Estate Investment Trust.

Risk & Volatility

Brixmor Property Group has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, Pennsylvania Real Estate Investment Trust has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Institutional & Insider Ownership

99.0% of Brixmor Property Group shares are held by institutional investors. 0.3% of Brixmor Property Group shares are held by insiders. Comparatively, 4.4% of Pennsylvania Real Estate Investment Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Brixmor Property Group and Pennsylvania Real Estate Investment Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brixmor Property Group $1.28 billion 3.44 $275.62 million $1.06 13.57
Pennsylvania Real Estate Investment Trust $399.95 million 1.78 -$11.34 million ($1.24) -8.23

Brixmor Property Group has higher revenue and earnings than Pennsylvania Real Estate Investment Trust. Pennsylvania Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Brixmor Property Group, indicating that it is currently the more affordable of the two stocks.

Summary

Brixmor Property Group beats Pennsylvania Real Estate Investment Trust on 12 of the 17 factors compared between the two stocks.

Brixmor Property Group Company Profile

Brixmor Property Group Inc. is an internally managed real estate investment trust. The Company conducts its operations primarily through Brixmor Operating Partnership LP and subsidiaries (collectively, the Operating Partnership). As of December 31, 2016, it owned interests in 512 shopping centers (the Portfolio) with approximately 86 million square feet of gross leasable area (GLA), including 511 shopping centers and one shopping center held through an unconsolidated joint venture. With an average shopping center size of 167,982 square feet as of December 31, 2016, the Company’s portfolio consisted predominantly of community and neighborhood shopping centers. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Texas, Florida, California, New York, Illinois, Georgia, New Jersey, Ohio, North Carolina, Michigan, Connecticut, Tennessee, Kentucky, Colorado, Arizona, Delaware, West Virginia, Vermont, Maine, Oklahoma and New Mexico.

Pennsylvania Real Estate Investment Trust Company Profile

Pennsylvania Real Estate Investment Trust (PREIT) is a self-managed and self-administered real estate investment trust (REIT). The Company’s primary business is owning and operating retail shopping malls, which it does primarily through operating partnership, PREIT Associates, L.P. (PREIT Associates). The Company is engaged in the ownership, management, leasing, acquisition, redevelopment, development and disposition of shopping malls. The Company has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of December 31, 2016, the Company owned interests in 30 retail properties, of which 26 are operating properties and four are development or redevelopment properties. As of December 31, 2016, the Company’s 26 operating properties included 22 shopping malls and four other retail properties, had a total of 21.7 million square feet and were located in nine states.

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