Financial Contrast: Simon Property Group (SPG) versus General Growth Properties (GGP)
Simon Property Group (NYSE: SPG) and General Growth Properties (NYSE:GGP) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.
This is a summary of recent recommendations for Simon Property Group and General Growth Properties, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Simon Property Group||0||5||10||0||2.67|
|General Growth Properties||1||5||5||0||2.36|
Simon Property Group presently has a consensus price target of $194.36, indicating a potential upside of 20.71%. General Growth Properties has a consensus price target of $25.73, indicating a potential upside of 23.87%. Given General Growth Properties’ higher possible upside, analysts plainly believe General Growth Properties is more favorable than Simon Property Group.
Valuation & Earnings
This table compares Simon Property Group and General Growth Properties’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Simon Property Group||$5.49 billion||9.12||$4.02 billion||$5.63||28.60|
|General Growth Properties||$2.51 billion||7.30||$1.76 billion||$1.19||17.45|
Simon Property Group has higher revenue and earnings than General Growth Properties. General Growth Properties is trading at a lower price-to-earnings ratio than Simon Property Group, indicating that it is currently the more affordable of the two stocks.
Simon Property Group pays an annual dividend of $7.20 per share and has a dividend yield of 4.5%. General Growth Properties pays an annual dividend of $0.88 per share and has a dividend yield of 4.2%. Simon Property Group pays out 127.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Growth Properties pays out 73.9% of its earnings in the form of a dividend. Simon Property Group has increased its dividend for 5 consecutive years and General Growth Properties has increased its dividend for 7 consecutive years.
Volatility and Risk
Simon Property Group has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, General Growth Properties has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.
Institutional & Insider Ownership
95.0% of Simon Property Group shares are held by institutional investors. Comparatively, 95.3% of General Growth Properties shares are held by institutional investors. 8.4% of Simon Property Group shares are held by insiders. Comparatively, 35.6% of General Growth Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares Simon Property Group and General Growth Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Simon Property Group||32.07%||39.29%||6.03%|
|General Growth Properties||50.01%||13.57%||5.07%|
Simon Property Group beats General Growth Properties on 10 of the 17 factors compared between the two stocks.
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.
About General Growth Properties
GGP Inc. (GGP), formerly General Growth Properties, Inc., is a self-administered and self-managed real estate investment trust (REIT). The Company operates as a holding company, which is engaged in the operation, development and management of retail and other rental properties, primarily regional malls. As of December 31, 2016, the Company owned, either entirely or with joint venture partners, 127 retail properties located throughout the United States comprising approximately 125 million square feet of gross leasable area (GLA). As of December 31, 2016, the Company’s retail properties included 200 Lafayette, The Shoppes at Buckland Hills, Northridge Fashion Center, Brass Mill Center, Jordan Creek Town Center, Westroads Mall and Stonestown Galleria. The Company’s business is conducted through GGP Operating Partnership, LP (GGPOP), GGP Nimbus, LP (GGPN) and GGP Limited Partnership (GGPLP, and together with GGPN and GGPOP, the Operating Partnerships), subsidiaries of GGP.
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