Retail Opportunity Investments Corp. (NASDAQ: ROIC) and Ramco-Gershenson Properties Trust (NYSE:RPT) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Profitability

This table compares Retail Opportunity Investments Corp. and Ramco-Gershenson Properties Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Retail Opportunity Investments Corp. 13.92% 2.71% 1.31%
Ramco-Gershenson Properties Trust 15.05% 4.99% 1.86%

Insider and Institutional Ownership

94.9% of Retail Opportunity Investments Corp. shares are held by institutional investors. Comparatively, 98.7% of Ramco-Gershenson Properties Trust shares are held by institutional investors. 2.2% of Retail Opportunity Investments Corp. shares are held by insiders. Comparatively, 1.6% of Ramco-Gershenson Properties Trust shares are held 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

Retail Opportunity Investments Corp. pays an annual dividend of $0.75 per share and has a dividend yield of 3.9%. Ramco-Gershenson Properties Trust pays an annual dividend of $0.88 per share and has a dividend yield of 6.7%. Retail Opportunity Investments Corp. pays out 227.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ramco-Gershenson Properties Trust pays out 214.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Opportunity Investments Corp. has increased its dividend for 4 consecutive years. Ramco-Gershenson Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Retail Opportunity Investments Corp. and Ramco-Gershenson Properties Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Retail Opportunity Investments Corp. N/A N/A N/A $0.33 57.61
Ramco-Gershenson Properties Trust $263.77 million 3.94 $165.05 million $0.41 31.95

Ramco-Gershenson Properties Trust has higher revenue and earnings than Retail Opportunity Investments Corp.. Ramco-Gershenson Properties Trust is trading at a lower price-to-earnings ratio than Retail Opportunity Investments Corp., indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Retail Opportunity Investments Corp. has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Ramco-Gershenson Properties Trust has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Retail Opportunity Investments Corp. and Ramco-Gershenson Properties Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Retail Opportunity Investments Corp. 0 4 3 0 2.43
Ramco-Gershenson Properties Trust 1 4 3 0 2.25

Retail Opportunity Investments Corp. currently has a consensus target price of $22.33, suggesting a potential upside of 17.48%. Ramco-Gershenson Properties Trust has a consensus target price of $15.14, suggesting a potential upside of 15.59%. Given Retail Opportunity Investments Corp.’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Retail Opportunity Investments Corp. is more favorable than Ramco-Gershenson Properties Trust.

Summary

Ramco-Gershenson Properties Trust beats Retail Opportunity Investments Corp. on 9 of the 13 factors compared between the two stocks.

Retail Opportunity Investments Corp. Company Profile

Retail Opportunity Investments Corp. (ROIC) is a fully integrated, self-managed real estate investment trust (REIT). The Company specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United States, anchored by supermarkets and drugstores. Retail Opportunity Investments Partnership, LP is the operating partnership of the Company. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business. As of December 31, 2016, the Company’s portfolio consisted of 82 properties (81 retail and one office) totaling approximately 9.4 million square feet of gross leasable area (GLA). As of December 31, 2016, the Company’s portfolio was approximately 97.6% leased.

Ramco-Gershenson Properties Trust Company Profile

Ramco-Gershenson Properties Trust is an equity real estate investment trust. The Company’s primary business is the ownership, management, redevelopment, development and operation of retail shopping centers. As of December 31, 2016, it owned and managed multi-anchored shopping centers in 12 metropolitan markets in the United States. It conducts its business through its operating partnership, Ramco-Gershenson Properties, L.P. It invests in large, multi-anchored shopping centers that include national chain store tenants and supermarket tenants. National chain anchor tenants in its centers include, among others, Bed Bath and Beyond, Dick’s Sporting Goods, and Home Depot. Supermarket anchor tenants in its centers include, among others, Publix Super Market, Whole Foods, Kroger and Sprouts. Its shopping centers are located in metropolitan markets, such as Metro Detroit, Southeast Florida, Greater Denver, Cincinnati, St. Louis, Jacksonville, Tampa/Lakeland, Milwaukee, Chicago and Atlanta.

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