Comparing Acadia Realty Trust (AKR) and Simon Property Group (SPG)

Acadia Realty Trust (NYSE: AKR) and Simon Property Group (NYSE:SPG) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares Acadia Realty Trust and Simon Property Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acadia Realty Trust 25.34% 2.77% 1.50%
Simon Property Group 31.96% 41.85% 6.09%

Valuation & Earnings

This table compares Acadia Realty Trust and Simon Property Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Acadia Realty Trust $189.94 million 12.84 $72.77 million $0.71 41.03
Simon Property Group $5.44 billion 18.89 $1.84 billion $5.67 28.31

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

Institutional & Insider Ownership

95.2% of Simon Property Group shares are owned by institutional investors. 1.7% of Acadia Realty Trust shares are owned by insiders. Comparatively, 8.4% of Simon Property Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Acadia Realty Trust pays an annual dividend of $1.04 per share and has a dividend yield of 3.6%. Simon Property Group pays an annual dividend of $7.20 per share and has a dividend yield of 4.5%. Acadia Realty Trust pays out 146.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simon Property Group pays out 127.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Acadia Realty Trust has raised its dividend for 4 consecutive years and Simon Property Group has raised its dividend for 7 consecutive years. Simon Property Group 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 Acadia Realty Trust and Simon Property Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Realty Trust 0 1 3 0 2.75
Simon Property Group 0 5 10 0 2.67

Acadia Realty Trust presently has a consensus target price of $33.50, suggesting a potential upside of 15.00%. Simon Property Group has a consensus target price of $192.33, suggesting a potential upside of 19.83%. Given Simon Property Group’s higher probable upside, analysts clearly believe Simon Property Group is more favorable than Acadia Realty Trust.

Volatility and Risk

Acadia Realty Trust has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, Simon Property Group has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Summary

Simon Property Group beats Acadia Realty Trust on 14 of the 17 factors compared between the two stocks.

Acadia Realty Trust Company Profile

Acadia Realty Trust is a real estate investment trust. The Company is focused on the ownership, acquisition, development and management of retail properties located in the United States. It operates through three segments: Core Portfolio, Funds and Structured Financing. Core Portfolio and Fund properties primarily consist of street and urban retail, and dense suburban shopping centers. Funds holds primarily retail real estate in which it co-invests with institutional investors. Structured Financing consists of earnings and expenses related to notes and mortgages receivable, which are held within the Core Portfolio or the Funds. As of December 31, 2016, it had ownership interests in 182 properties within its core portfolio. In the Core Portfolio segment, the Company owned an interest in a 311,000 square foot shopping center, a 28,000 square foot retail and an interest in an 87,000 square foot retail property, among others, as of December 31, 2016.

Simon Property Group Company Profile

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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