Vornado Realty Trust (NYSE: VNO) and Seritage Growth Properties (NYSE:SRG) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, earnings and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Vornado Realty Trust and Seritage Growth Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vornado Realty Trust 0 3 5 0 2.63
Seritage Growth Properties 1 1 1 0 2.00

Vornado Realty Trust presently has a consensus price target of $97.13, suggesting a potential upside of 30.16%. Seritage Growth Properties has a consensus price target of $43.00, suggesting a potential downside of 9.70%. Given Vornado Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Vornado Realty Trust is more favorable than Seritage Growth Properties.

Institutional and Insider Ownership

86.1% of Vornado Realty Trust shares are held by institutional investors. Comparatively, 91.9% of Seritage Growth Properties shares are held by institutional investors. 9.8% of Vornado Realty Trust shares are held by insiders. Comparatively, 9.8% of Seritage Growth Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Vornado Realty Trust and Seritage Growth Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vornado Realty Trust 37.96% 4.51% 1.39%
Seritage Growth Properties -31.23% -5.52% -2.83%

Risk & Volatility

Vornado Realty Trust has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Seritage Growth Properties has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.

Dividends

Vornado Realty Trust pays an annual dividend of $2.40 per share and has a dividend yield of 3.2%. Seritage Growth Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Vornado Realty Trust pays out 51.7% of its earnings in the form of a dividend. Seritage Growth Properties pays out -42.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation & Earnings

This table compares Vornado Realty Trust and Seritage Growth Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vornado Realty Trust $2.70 billion 5.24 $1.40 billion $4.64 16.08
Seritage Growth Properties $248.20 million 6.51 $163.67 million ($2.37) -20.09

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

Summary

Vornado Realty Trust beats Seritage Growth Properties on 11 of the 16 factors compared between the two stocks.

Vornado Realty Trust Company Profile

Vornado Realty Trust is a real estate investment trust (REIT). The Company conducts its business through Vornado Realty L.P. (the Operating Partnership). The Company operates through two segments: New York and Washington, DC. As of December 31, 2016, the Company’s New York segment consisted of 28.3 million square feet in 86 properties. Its properties include 1290 Avenue of the Americas, Two Penn Plaza, 770 Broadway and 90 Park Avenue. As of December 31, 2016, the Company’s Washington, DC segment consisted of 58 properties aggregating 14.7 million square feet, including 11.1 million square feet of office space in 44 properties, nine residential properties containing 3,156 units and a hotel property. Its properties include 2001 Jefferson Davis Highway, 223 23rd Street, 2221 South Clark Street and 1700 M Street. The Company’s interests in properties are held by the Operating Partnership. As of December 31, 2016, the Company owned the 3.7 million square foot Mart (theMart) in Chicago.

Seritage Growth Properties Company Profile

Seritage Growth Properties (Seritage) is a self-administered and self-managed real estate investment trust. The Company is engaged in the acquisition, ownership, development, redevelopment, management and leasing of diversified retail real estate throughout the United States. Its assets are held by and its operations are primarily conducted through, directly or indirectly, Seritage Growth Properties, L.P. (Operating Partnership). As of December 31, 2016, the Company’s portfolio included approximately 42.2 million square feet of gross leasable area (GLA), consisting of 235 owned properties totaling over 36.8 million square feet of GLA across 49 states and Puerto Rico, and interests in 31 joint venture properties totaling over 5.4 million square feet of GLA across 17 states. As of December 31, 2016, it included over 3,000 acres of land or approximately 13 acres per site for its owned properties. Its properties are primarily located in areas, including in California, Florida and Texas.

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