Ramco-Gershenson Properties Trust (RPT) and Retail Properties of America (RPAI) Critical Comparison

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

Dividends

Ramco-Gershenson Properties Trust pays an annual dividend of $0.88 per share and has a dividend yield of 6.4%. Retail Properties of America pays an annual dividend of $0.66 per share and has a dividend yield of 5.4%. Ramco-Gershenson Properties Trust pays out 149.2% 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 Properties of America pays out 103.1% 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 has increased its dividend for 5 consecutive years. Ramco-Gershenson Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Ramco-Gershenson Properties Trust 20.75% 6.96% 2.55%
Retail Properties of America 28.84% 7.61% 3.71%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Ramco-Gershenson Properties Trust and Retail Properties of America, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ramco-Gershenson Properties Trust 1 5 4 0 2.30
Retail Properties of America 0 1 5 0 2.83

Ramco-Gershenson Properties Trust currently has a consensus price target of $14.86, suggesting a potential upside of 8.21%. Retail Properties of America has a consensus price target of $16.08, suggesting a potential upside of 30.76%. Given Retail Properties of America’s stronger consensus rating and higher possible upside, analysts clearly believe Retail Properties of America is more favorable than Ramco-Gershenson Properties Trust.

Institutional and Insider Ownership

79.1% of Retail Properties of America shares are owned by institutional investors. 3.7% of Ramco-Gershenson Properties Trust shares are owned by company insiders. Comparatively, 0.4% of Retail Properties of America shares are owned 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.

Earnings & Valuation

This table compares Ramco-Gershenson Properties Trust and Retail Properties of America’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ramco-Gershenson Properties Trust $260.93 million 4.18 $59.66 million $0.59 23.27
Retail Properties of America $583.14 million 4.79 $166.81 million $0.64 19.22

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

Volatility & Risk

Ramco-Gershenson Properties Trust has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, Retail Properties of America has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Summary

Retail Properties of America beats Ramco-Gershenson Properties Trust on 12 of the 17 factors compared between the two stocks.

About Ramco-Gershenson Properties Trust

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.

About Retail Properties of America

Retail Properties of America, Inc. is a real estate investment trust (REIT). The Company owns and operates shopping centers located in the United States. As of December 31, 2016, it owned 156 retail operating properties representing 25,832,000 square feet of gross leasable area (GLA). Its retail operating portfolio includes neighborhood and community centers, power centers, and lifestyle centers and multi-tenant retail-focused mixed-use properties, as well as single-user retail properties. As of December 31, 2016, it had identified 10 target markets, including Dallas, Washington, District of Columbia/Baltimore, New York, Atlanta, Seattle, Chicago, Houston, San Antonio, Phoenix and Austin. Its properties include 23rd Street Plaza, Azalea Square I, Boulevard Plaza, Brown’s Lane, Cranberry Square, Denton Crossing, Dorman Center I & II, Edgemont Town Center, Edwards Multiplex, Green’s Corner, Home Depot Plaza, Lake Mary Pointe, Lincoln Park, University Town Center and Winchester Commons.

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