Wheeler Real Estate Investment Trust (NASDAQ: WHLR) and Pennsylvania Real Estate Investment Trust (NYSE:PEI) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.

Dividends

Wheeler Real Estate Investment Trust pays an annual dividend of $1.68 per share and has a dividend yield of 15.7%. Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 8.1%. Wheeler Real Estate Investment Trust pays out -91.8% of its earnings in the form of a dividend. Pennsylvania Real Estate Investment Trust pays out -64.1% 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. Pennsylvania Real Estate Investment Trust has increased its dividend for 5 consecutive years. Wheeler Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Wheeler Real Estate Investment Trust and Pennsylvania Real Estate Investment Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wheeler Real Estate Investment Trust 0 1 3 0 2.75
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86

Wheeler Real Estate Investment Trust presently has a consensus target price of $16.00, suggesting a potential upside of 49.81%. Pennsylvania Real Estate Investment Trust has a consensus target price of $14.17, suggesting a potential upside of 36.88%. Given Wheeler Real Estate Investment Trust’s stronger consensus rating and higher probable upside, research analysts plainly believe Wheeler Real Estate Investment Trust is more favorable than Pennsylvania Real Estate Investment Trust.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Wheeler Real Estate Investment Trust $52.98 million 1.75 $32.30 million ($1.83) -5.84
Pennsylvania Real Estate Investment Trust $392.34 million 1.84 $217.76 million ($1.31) -7.90

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

Institutional & Insider Ownership

99.3% of Pennsylvania Real Estate Investment Trust shares are held by institutional investors. 5.3% of Wheeler Real Estate Investment Trust shares are held by company insiders. Comparatively, 4.4% of Pennsylvania Real Estate Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Wheeler Real Estate Investment Trust -13.41% -14.10% -1.88%
Pennsylvania Real Estate Investment Trust -18.13% -9.06% -2.66%

Risk & Volatility

Wheeler Real Estate Investment Trust has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Pennsylvania Real Estate Investment Trust has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Summary

Wheeler Real Estate Investment Trust beats Pennsylvania Real Estate Investment Trust on 9 of the 17 factors compared between the two stocks.

Wheeler Real Estate Investment Trust Company Profile

Wheeler Real Estate Investment Trust, Inc. is a self-managed commercial real estate investment company. The Company focuses on acquiring and managing retail properties with a primary focus on grocery-anchored centers. As of December 31, 2016, the Company owned a portfolio consisting of 74 properties, including 59 retail shopping centers and five freestanding retail properties totaling 4,906,511 gross leasable square feet of which approximately 94% were leased, one office property, eight undeveloped land parcels totaling approximately 70 acres and one redevelopment project. Its properties are located in Virginia, North Carolina, South Carolina, Florida, Georgia, Kentucky, Oklahoma, Tennessee, Alabama, New Jersey, Pennsylvania and West Virginia. Its properties include Alex City Marketplace, Berkley Shopping Center, Clover Plaza, Darien Shopping Center, Cypress Shopping Center, Harrodsburg Marketplace, LaGrange Marketplace, Riverbridge Shopping Center and Village of Martinsville.

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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