Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Getty Realty (NYSE:GTY) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.

Insider & Institutional Ownership

99.0% of Pennsylvania Real Estate Investment Trust shares are held by institutional investors. Comparatively, 61.5% of Getty Realty shares are held by institutional investors. 4.4% of Pennsylvania Real Estate Investment Trust shares are held by insiders. Comparatively, 22.3% of Getty Realty shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Pennsylvania Real Estate Investment Trust and Getty Realty’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $399.95 million 1.91 -$11.34 million ($1.24) -8.81
Getty Realty $115.27 million 9.54 $38.41 million $1.19 23.34

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

Profitability

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

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -16.35% -7.60% -2.34%
Getty Realty 36.66% 9.62% 4.89%

Risk & Volatility

Pennsylvania Real Estate Investment Trust has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Getty Realty has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.7%. Getty Realty pays an annual dividend of $1.12 per share and has a dividend yield of 4.0%. Pennsylvania Real Estate Investment Trust pays out -67.7% of its earnings in the form of a dividend. Getty Realty pays out 94.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennsylvania Real Estate Investment Trust has raised its dividend for 4 consecutive years and Getty Realty has raised its dividend for 5 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Pennsylvania Real Estate Investment Trust and Getty Realty, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86
Getty Realty 1 0 2 0 2.33

Pennsylvania Real Estate Investment Trust presently has a consensus price target of $13.83, indicating a potential upside of 26.68%. Getty Realty has a consensus price target of $27.33, indicating a potential downside of 1.57%. Given Pennsylvania Real Estate Investment Trust’s higher probable upside, analysts clearly believe Pennsylvania Real Estate Investment Trust is more favorable than Getty Realty.

Summary

Getty Realty beats Pennsylvania Real Estate Investment Trust on 11 of the 17 factors compared between the two stocks.

Pennsylvania Real Estate Investment Trust Company Profile

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.

Getty Realty Company Profile

Getty Realty Corp. is a real estate investment trust (REIT). The Company specializes in the ownership, leasing and financing of convenience store and gasoline station properties. As of June 30, 2017, the Company’s 825 properties were located in 26 states across the United States and Washington, District of Columbia. Its properties are operated under a range of brands, including 76, Aloha, BP, Citgo, Conoco, Exxon, Getty, Mobil, RaceTrac, Shell and Valero. The Company owns the Getty name in connection with its real estate and the petroleum marketing business in the United States. As of June 30, 2017, the Company had owned 738 properties and leased 87 properties from third-party landlords. Its typical property is used as a convenience store and gasoline station. Its properties are concentrated in the Northeast and Mid-Atlantic regions.

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