Tanger Factory Outlet Centers (SKT) and Simon Property Group (SPG) Critical Comparison

Tanger Factory Outlet Centers (NYSE: SKT) and Simon Property Group (NYSE:SPG) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Tanger Factory Outlet Centers and Simon Property Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tanger Factory Outlet Centers 1 4 1 0 2.00
Simon Property Group 0 5 11 0 2.69

Tanger Factory Outlet Centers presently has a consensus target price of $24.88, suggesting a potential upside of 6.85%. Simon Property Group has a consensus target price of $191.88, suggesting a potential upside of 22.37%. Given Simon Property Group’s stronger consensus rating and higher probable upside, analysts clearly believe Simon Property Group is more favorable than Tanger Factory Outlet Centers.

Dividends

Tanger Factory Outlet Centers pays an annual dividend of $1.37 per share and has a dividend yield of 5.9%. Simon Property Group pays an annual dividend of $7.40 per share and has a dividend yield of 4.7%. Tanger Factory Outlet Centers pays out 221.0% 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 pays out 118.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tanger Factory Outlet Centers has increased its dividend for 8 consecutive years and Simon Property Group has increased its dividend for 25 consecutive years.

Profitability

This table compares Tanger Factory Outlet Centers and Simon Property Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tanger Factory Outlet Centers 12.34% 8.98% 2.37%
Simon Property Group 35.14% 44.93% 6.22%

Earnings & Valuation

This table compares Tanger Factory Outlet Centers and Simon Property Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tanger Factory Outlet Centers $465.83 million 4.72 $193.74 million $0.62 37.55
Simon Property Group $5.54 billion 18.11 $1.95 billion $6.24 25.13

Simon Property Group has higher revenue and earnings than Tanger Factory Outlet Centers. Simon Property Group is trading at a lower price-to-earnings ratio than Tanger Factory Outlet Centers, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

95.3% of Tanger Factory Outlet Centers shares are held by institutional investors. Comparatively, 47.6% of Simon Property Group shares are held by institutional investors. 4.8% of Tanger Factory Outlet Centers shares are held by insiders. Comparatively, 8.4% of Simon Property Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Tanger Factory Outlet Centers has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Simon Property Group has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Summary

Simon Property Group beats Tanger Factory Outlet Centers on 14 of the 17 factors compared between the two stocks.

About Tanger Factory Outlet Centers

Tanger Factory Outlet Centers, Inc. is an owner and operator of outlet centers in the United States and Canada. The Company is a fully-integrated, self-administered and self-managed real estate investment trust (REIT), which focuses on developing, acquiring, owning, operating and managing outlet shopping centers. As of December 31, 2016, its portfolio consisted of 36 outlet centers, with a total gross leasable area of approximately 12.7 million square feet, which were 98% occupied and contained over 2,600 stores representing approximately 400 store brands. Its outlet centers and other assets are held by, and all of its operations are conducted by, Tanger Properties Limited Partnership and subsidiaries (Operating Partnership). The Company owns the majority of the units of partnership interest issued by the Operating Partnership, through its subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust controls the Operating Partnership as its sole general partner.

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.

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