Saul Centers (NYSE: BFS) and Kite Realty Group Trust (NYSE:KRG) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Volatility & Risk

Saul Centers has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Kite Realty Group Trust has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Valuation and Earnings

This table compares Saul Centers and Kite Realty Group Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Saul Centers $221.81 million 6.05 $144.68 million $1.58 38.99
Kite Realty Group Trust $360.76 million 4.72 $224.39 million $0.14 145.64

Kite Realty Group Trust has higher revenue and earnings than Saul Centers. Saul Centers is trading at a lower price-to-earnings ratio than Kite Realty Group Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Saul Centers pays an annual dividend of $2.04 per share and has a dividend yield of 3.3%. Kite Realty Group Trust pays an annual dividend of $1.21 per share and has a dividend yield of 5.9%. Saul Centers pays out 129.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kite Realty Group Trust pays out 864.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saul Centers has raised its dividend for 3 consecutive years and Kite Realty Group Trust has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of recent ratings for Saul Centers and Kite Realty Group Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Saul Centers 0 1 1 0 2.50
Kite Realty Group Trust 0 3 3 1 2.71

Saul Centers presently has a consensus price target of $72.00, suggesting a potential upside of 16.88%. Kite Realty Group Trust has a consensus price target of $26.00, suggesting a potential upside of 27.51%. Given Kite Realty Group Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Kite Realty Group Trust is more favorable than Saul Centers.

Insider and Institutional Ownership

45.2% of Saul Centers shares are owned by institutional investors. Comparatively, 95.8% of Kite Realty Group Trust shares are owned by institutional investors. 48.8% of Saul Centers shares are owned by insiders. Comparatively, 1.9% of Kite Realty Group Trust shares are owned by 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.

Profitability

This table compares Saul Centers and Kite Realty Group Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Saul Centers 21.15% 23.85% 3.42%
Kite Realty Group Trust 3.29% 0.73% 0.33%

Summary

Saul Centers beats Kite Realty Group Trust on 9 of the 17 factors compared between the two stocks.

Saul Centers Company Profile

Saul Centers, Inc. operates as a real estate investment trust. The Company’s principal business activity is the ownership, management and development of income-producing properties. It operates through two segments: Shopping Centers and Mixed-Use Properties. The Company, which conducts all of its activities through its subsidiaries, the Saul Holdings Limited Partnership (Operating Partnership) and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-used properties in the Washington, District of Columbia/Baltimore metropolitan area. As of December 31, 2016, it properties (the Current Portfolio Properties) consisted of 49 shopping center properties (the Shopping Centers), six mixed-use properties, which consists of office, retail and multi-family residential uses (the Mixed-Use Properties) and three (non-operating) development properties.

Kite Realty Group Trust Company Profile

Kite Realty Group Trust is a real estate investment trust. The Company, through its subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership, operation, acquisition, development and redevelopment of neighborhood and community shopping centers in selected markets in the United States. As of December 31, 2016, the Company owned interests in 108 operating retail properties totaling approximately 21.4 million square feet of gross leasable area (including approximately 6.3 million square feet of non-owned anchor space) located in 20 states. As of December 31, 2016, the Company had an interest in two development projects under construction. In addition to its development projects, as of December 31, 2016, the Company had nine redevelopment projects. As of December 31, 2016, the Company owned interests in one office operating property and an associated parking garage.

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