Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Four Corners Property Trust (NYSE:FCPT) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $399.95 million 2.01 -$11.34 million ($1.24) -9.29
Four Corners Property Trust $124.02 million 13.13 $156.80 million $1.41 18.87

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

Insider & Institutional Ownership

99.0% of Pennsylvania Real Estate Investment Trust shares are held by institutional investors. Comparatively, 87.4% of Four Corners Property Trust shares are held by institutional investors. 4.4% of Pennsylvania Real Estate Investment Trust shares are held by insiders. Comparatively, 0.2% of Four Corners Property Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Pennsylvania Real Estate Investment Trust and Four Corners Property Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86
Four Corners Property Trust 0 1 2 0 2.67

Pennsylvania Real Estate Investment Trust currently has a consensus target price of $13.83, suggesting a potential upside of 20.08%. Four Corners Property Trust has a consensus target price of $26.67, suggesting a potential upside of 0.25%. Given Pennsylvania Real Estate Investment Trust’s higher probable upside, equities analysts clearly believe Pennsylvania Real Estate Investment Trust is more favorable than Four Corners Property Trust.

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.3%. Four Corners Property Trust pays an annual dividend of $0.97 per share and has a dividend yield of 3.6%. Pennsylvania Real Estate Investment Trust pays out -67.7% of its earnings in the form of a dividend. Four Corners Property Trust pays out 68.8% 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. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -16.35% -7.60% -2.34%
Four Corners Property Trust 65.46% 17.37% 8.56%

Summary

Four Corners Property Trust beats Pennsylvania Real Estate Investment Trust on 9 of the 16 factors compared between the two stocks.

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.

Four Corners Property Trust Company Profile

Four Corners Property Trust, Inc. is a self-administered company and real estate investment trust (REIT), which owns, acquires and leases properties for use in the restaurant and food service related industries. The Company operates through two segments: real estate operations and restaurant operations. Its real estate operations segment consists of rental revenues primarily generated by leasing restaurant properties to tenants through triple-net lease arrangements under which the tenant is primarily responsible for ongoing costs relating to the properties. Its restaurant operations segment is conducted through its taxable REIT subsidiary, Kerrow Holdings, LLC, and consists of its Kerrow Restaurant Operating Business. As of December 31, 2016, it had owned 481 properties, all within the continental United States. Of these properties, 475 were held for investment and leased to tenants under triple-net leases and had an aggregate leasable area of approximately 3.4 million square feet.

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