Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Kimco Realty Corporation (NYSE:KIM) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Insider & Institutional Ownership

99.0% of Pennsylvania Real Estate Investment Trust shares are held by institutional investors. Comparatively, 89.1% of Kimco Realty Corporation shares are held by institutional investors. 4.4% of Pennsylvania Real Estate Investment Trust shares are held by company insiders. Comparatively, 2.9% of Kimco Realty Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 8.0%. Kimco Realty Corporation pays an annual dividend of $1.08 per share and has a dividend yield of 5.5%. Pennsylvania Real Estate Investment Trust pays out -64.1% of its earnings in the form of a dividend. Kimco Realty Corporation pays out 220.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennsylvania Real Estate Investment Trust has raised its dividend for 7 consecutive years and Kimco Realty Corporation has raised 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.

Analyst Ratings

This is a summary of current ratings and recommmendations for Pennsylvania Real Estate Investment Trust and Kimco Realty Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86
Kimco Realty Corporation 0 7 7 0 2.50

Pennsylvania Real Estate Investment Trust presently has a consensus price target of $14.08, indicating a potential upside of 34.25%. Kimco Realty Corporation has a consensus price target of $24.97, indicating a potential upside of 27.72%. Given Pennsylvania Real Estate Investment Trust’s higher possible upside, analysts clearly believe Pennsylvania Real Estate Investment Trust is more favorable than Kimco Realty Corporation.

Earnings & Valuation

This table compares Pennsylvania Real Estate Investment Trust and Kimco Realty Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $392.34 million 1.87 $217.76 million ($1.31) -8.01
Kimco Realty Corporation $1.17 billion 7.11 $764.78 million $0.49 39.90

Kimco Realty Corporation has higher revenue and earnings than Pennsylvania Real Estate Investment Trust. Pennsylvania Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Kimco Realty Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pennsylvania Real Estate Investment Trust and Kimco Realty Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -18.13% -9.06% -2.66%
Kimco Realty Corporation 21.77% 4.68% 2.23%

Volatility and Risk

Pennsylvania Real Estate Investment Trust has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Kimco Realty Corporation has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Summary

Kimco Realty Corporation beats Pennsylvania Real Estate Investment Trust on 9 of the 16 factors compared between the two stocks.

About Pennsylvania Real Estate Investment Trust

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.

About Kimco Realty Corporation

Kimco Realty Corporation is a self-administered real estate investment trust. The Company is engaged in the ownership, management, development and operation of open-air shopping centers, which are anchored generally by discount department stores, grocery stores or drugstores. As of June 30, 2017, the Company had interests in 510 shopping center properties, including 84 million square feet of gross leasable area (GLA), located in 32 states, Puerto Rico and Canada. As of March 31, 2017, the Company had 380 other property interests, primarily through the Company’s preferred equity investments and other real estate investments, totaling 5.8 million square feet of GLA.

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