Douglas Emmett (NYSE:DEI) and Retail Properties of America (NYSE:RPAI) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Douglas Emmett and Retail Properties of America, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Douglas Emmett 0 5 6 0 2.55
Retail Properties of America 0 2 4 0 2.67

Douglas Emmett presently has a consensus target price of $41.00, indicating a potential upside of 0.61%. Retail Properties of America has a consensus target price of $14.50, indicating a potential upside of 19.05%. Given Retail Properties of America’s stronger consensus rating and higher probable upside, analysts plainly believe Retail Properties of America is more favorable than Douglas Emmett.

Earnings & Valuation

This table compares Douglas Emmett and Retail Properties of America’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Douglas Emmett $881.32 million 7.87 $116.08 million $2.02 20.17
Retail Properties of America $482.50 million 5.39 $77.64 million $1.03 11.83

Douglas Emmett has higher revenue and earnings than Retail Properties of America. Retail Properties of America is trading at a lower price-to-earnings ratio than Douglas Emmett, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Douglas Emmett and Retail Properties of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Douglas Emmett 13.58% 2.97% 1.40%
Retail Properties of America 16.09% 4.24% 2.11%

Insider & Institutional Ownership

93.2% of Douglas Emmett shares are held by institutional investors. Comparatively, 84.5% of Retail Properties of America shares are held by institutional investors. 16.2% of Douglas Emmett shares are held by company insiders. Comparatively, 0.5% of Retail Properties of America shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Douglas Emmett pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Retail Properties of America pays an annual dividend of $0.66 per share and has a dividend yield of 5.4%. Douglas Emmett pays out 51.5% of its earnings in the form of a dividend. Retail Properties of America 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. Douglas Emmett has raised its dividend for 8 consecutive years.

Risk & Volatility

Douglas Emmett has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Retail Properties of America has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

Douglas Emmett beats Retail Properties of America on 11 of the 17 factors compared between the two stocks.

About Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.

About Retail Properties of America

Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use component. As of December 31, 2018, the Company owned 105 retail operating properties in the United States representing 20.1 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI.

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