Select Income REIT (NASDAQ: SIR) and CBL & Associates Properties (NYSE:CBL) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Dividends

Select Income REIT pays an annual dividend of $2.04 per share and has a dividend yield of 8.3%. CBL & Associates Properties pays an annual dividend of $1.06 per share and has a dividend yield of 12.5%. Select Income REIT pays out 210.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CBL & Associates Properties pays out 179.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CBL & Associates Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Select Income REIT and CBL & Associates Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Select Income REIT $462.04 million N/A $323.87 million $0.97 25.23
CBL & Associates Properties $977.46 million 1.48 $637.66 million $0.59 14.36

CBL & Associates Properties has higher revenue and earnings than Select Income REIT. CBL & Associates Properties is trading at a lower price-to-earnings ratio than Select Income REIT, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

48.2% of Select Income REIT shares are owned by institutional investors. Comparatively, 89.5% of CBL & Associates Properties shares are owned by institutional investors. 2.0% of Select Income REIT shares are owned by company insiders. Comparatively, 11.7% of CBL & Associates Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Select Income REIT and CBL & Associates Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Select Income REIT 18.65% 4.18% 1.85%
CBL & Associates Properties 14.88% 9.43% 2.05%

Analyst Ratings

This is a breakdown of current ratings for Select Income REIT and CBL & Associates Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Select Income REIT 0 0 1 0 3.00
CBL & Associates Properties 1 7 2 0 2.10

Select Income REIT presently has a consensus price target of $34.00, suggesting a potential upside of 38.95%. CBL & Associates Properties has a consensus price target of $10.25, suggesting a potential upside of 21.02%. Given Select Income REIT’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Select Income REIT is more favorable than CBL & Associates Properties.

Volatility and Risk

Select Income REIT has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, CBL & Associates Properties has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Summary

CBL & Associates Properties beats Select Income REIT on 10 of the 15 factors compared between the two stocks.

Select Income REIT Company Profile

Select Income REIT is a real estate investment trust. The Company is engaged in the ownership of properties that include buildings and leased industrial lands that are primarily net leased to single tenants. As of December 31, 2016, the Company owned 121 properties (362 buildings, leasable land parcels and easements) with approximately 44.8 million rentable square feet. As of December 31, 2016, the Company’s properties consisted of 110 office and industrial properties (133 buildings) with approximately 27.0 million square feet located in 34 states throughout the mainland United States (Mainland Properties), and 11 properties (229 buildings, leasable land parcels and easements) located on the island of Oahu, Hawaii, with approximately 17.8 million rentable square feet that are primarily leased to industrial and commercial tenants (Hawaii Properties). As of December 31, 2016, the Company’s properties were leased to 312 different tenants.

CBL & Associates Properties Company Profile

CBL & Associates Properties, Inc. is a self-managed, self-administered, integrated real estate investment trust. The Company owns, develops, acquires, leases, manages and operates regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers and office properties. Its segments are Malls, Associated Centers, Community Centers and All Other. As of December 31, 2016, the Company owned a controlling interest in 65 Malls and non-controlling interests in nine Malls. As of December 31, 2016, the Company owned a controlling interest in 20 Associated Centers and a non-controlling interest in three Associated Centers. As of December 31, 2016, the Company owned a controlling interest in four Community Centers and a non-controlling interest in five Community Centers. As of December 31, 2016, the Company’s properties were located in 27 states, primarily in the southeastern and mid-western United States.

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