Contrasting Alexander’s (NYSE:ALX) & Seritage Growth Properties (NYSE:SRG)

Alexander’s (NYSE:ALX) and Seritage Growth Properties (NYSE:SRG) are both small-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Institutional and Insider Ownership

32.0% of Alexander’s shares are held by institutional investors. Comparatively, 78.9% of Seritage Growth Properties shares are held by institutional investors. 26.4% of Alexander’s shares are held by insiders. Comparatively, 0.2% of Seritage Growth Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 7.3%. Seritage Growth Properties pays an annual dividend of $1.00 per share and has a dividend yield of 49.6%. Alexander’s pays out 54.5% of its earnings in the form of a dividend. Seritage Growth Properties pays out -96.2% 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. Alexander’s has increased its dividend for 1 consecutive years. Seritage Growth Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Alexander’s has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Seritage Growth Properties has a beta of 2.19, suggesting that its share price is 119% more volatile than the S&P 500.

Profitability

This table compares Alexander’s and Seritage Growth Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alexander’s	79.06%	123.09%	14.43%
Seritage Growth Properties	-419.02%	-17.06%	-12.94%

Earnings & Valuation

This table compares Alexander’s and Seritage Growth Properties”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander’s	$213.18 million	5.89	$28.22 million	$33.05	7.43
Seritage Growth Properties	$12.88 million	8.81	-$68.21 million	($1.04)	-1.94

Alexander’s has higher revenue and earnings than Seritage Growth Properties. Seritage Growth Properties is trading at a lower price-to-earnings ratio than Alexander’s, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Alexander’s and Seritage Growth Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander’s	1	0	1	1	2.67
Seritage Growth Properties	1	0	0	0	1.00

Alexander’s currently has a consensus target price of $212.00, indicating a potential downside of 13.68%. Given Alexander’s’ stronger consensus rating and higher probable upside, analysts plainly believe Alexander’s is more favorable than Seritage Growth Properties.

Summary

Alexander’s beats Seritage Growth Properties on 13 of the 18 factors compared between the two stocks.

About Alexander’s

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.

About Seritage Growth Properties

Seritage Growth Properties operates as a real estate investment trust. The firm engages in the acquisition, ownership, development, redevelopment, management, and leasing of retail properties throughout the United States. Its property portfolio includes mall, shopping centers and freestanding locations. The company was founded on June 3, 2015 and is headquartered in New York, NY.