Reviewing DDR Corp. (DDR) and Simon Property Group (SPG)
DDR Corp. (NYSE: DDR) and Simon Property Group (NYSE:SPG) are both mid-cap financials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.
This table compares DDR Corp. and Simon Property Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Simon Property Group||31.96%||41.85%||6.09%|
Earnings and Valuation
This table compares DDR Corp. and Simon Property Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|DDR Corp.||$969.51 million||3.06||$60.01 million||($0.46)||-17.50|
|Simon Property Group||$5.44 billion||18.73||$1.84 billion||$5.66||28.12|
Simon Property Group has higher revenue and earnings than DDR Corp.. DDR Corp. is trading at a lower price-to-earnings ratio than Simon Property Group, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and target prices for DDR Corp. and Simon Property Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Simon Property Group||0||5||10||0||2.67|
DDR Corp. presently has a consensus price target of $12.09, suggesting a potential upside of 50.20%. Simon Property Group has a consensus price target of $192.33, suggesting a potential upside of 20.85%. Given DDR Corp.’s higher possible upside, research analysts clearly believe DDR Corp. is more favorable than Simon Property Group.
Insider and Institutional Ownership
81.3% of DDR Corp. shares are held by institutional investors. Comparatively, 95.2% of Simon Property Group shares are held by institutional investors. 16.1% of DDR Corp. shares are held by insiders. Comparatively, 8.4% of Simon Property Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
DDR Corp. pays an annual dividend of $0.76 per share and has a dividend yield of 9.4%. Simon Property Group pays an annual dividend of $7.40 per share and has a dividend yield of 4.6%. DDR Corp. pays out -165.2% of its earnings in the form of a dividend. Simon Property Group pays out 130.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DDR Corp. has raised its dividend for 7 consecutive years and Simon Property Group has raised its dividend for 6 consecutive years. DDR Corp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
DDR Corp. has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Simon Property Group has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.
Simon Property Group beats DDR Corp. on 11 of the 17 factors compared between the two stocks.
About DDR Corp.
DDR Corp. is a self-administered and self-managed real estate investment trust. It operates through two segments: shopping centers and loan investments. It is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers. As of December 31, 2016, it owned and managed approximately 106 million total square feet of gross leasable area (GLA). As of December 31, 2016, the portfolio properties included 319 shopping centers (including 152 centers owned through joint ventures). As of December 31, 2016, the portfolio properties also included over 650 acres of undeveloped land, including parcels located adjacent to certain of the shopping centers. As of December 31, 2016, the portfolio properties aggregated to 75.8 million square feet of Company-owned GLA located in 35 states, plus Puerto Rico. These centers are in the Southeast and Midwest, with significant concentrations in Florida, Georgia, Ohio and North Carolina, as well as Puerto Rico.
About Simon Property Group
Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. Simon Property Group, L.P. (Operating Partnership), is the Company’s partnership subsidiary that owns all of its real estate properties and other assets. As of December 31, 2016, the Company owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 Premium Outlets, 14 Mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. As of December 31, 2016, it had redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at 27 properties in the United States and it had one outlet and one other retail project under development.
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