National Retail Properties (NNN) and Pennsylvania Real Estate Investment Trust (PEI) Head-To-Head Analysis

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

Dividends

National Retail Properties pays an annual dividend of $1.90 per share and has a dividend yield of 4.5%. Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.3%. National Retail Properties pays out 135.7% 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. National Retail Properties has increased its dividend for 7 consecutive years and Pennsylvania Real Estate Investment Trust has increased its dividend for 5 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares National Retail Properties and Pennsylvania Real Estate Investment Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Retail Properties $533.65 million 12.06 $239.50 million $1.40 30.24
Pennsylvania Real Estate Investment Trust $399.95 million 2.00 -$11.34 million ($1.24) -9.23

National Retail Properties 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 National Retail Properties, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for National Retail Properties and Pennsylvania Real Estate Investment Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Retail Properties 0 0 5 0 3.00
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86

National Retail Properties currently has a consensus price target of $49.00, indicating a potential upside of 15.73%. Pennsylvania Real Estate Investment Trust has a consensus price target of $13.83, indicating a potential upside of 20.92%. Given Pennsylvania Real Estate Investment Trust’s higher possible upside, analysts clearly believe Pennsylvania Real Estate Investment Trust is more favorable than National Retail Properties.

Profitability

This table compares National Retail Properties and Pennsylvania Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Retail Properties 44.96% 8.47% 4.08%
Pennsylvania Real Estate Investment Trust -16.35% -7.60% -2.34%

Insider and Institutional Ownership

90.5% of National Retail Properties shares are owned by institutional investors. Comparatively, 97.7% of Pennsylvania Real Estate Investment Trust shares are owned by institutional investors. 1.0% of National Retail Properties shares are owned by company insiders. Comparatively, 4.4% of Pennsylvania Real Estate Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

National Retail Properties has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500. Comparatively, Pennsylvania Real Estate Investment Trust has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Summary

National Retail Properties beats Pennsylvania Real Estate Investment Trust on 11 of the 17 factors compared between the two stocks.

National Retail Properties Company Profile

National Retail Properties, Inc. is a real estate investment trust (REIT). The Company acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment. As of December 31, 2016, it owned 2,535 properties with an aggregate gross leasable area of approximately 27,204,000 square feet, located in 48 states. The Company focuses on investing in a range of property and tenant types; leases, mortgages and other types of real estate interests; loans secured by personal property; loans secured by partnership or membership interests in partnerships or limited liability companies, and securities of other REITs, or other issuers, including for the purpose of exercising control over such entities. The Company owns a portfolio of freestanding retail stores across the United States. It owns approximately 2,290 stores, which are leased to over 400 tenants in approximately 40 different retail categories.

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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