Urban Edge Properties (NYSE: UE) and Pennsylvania Real Estate Investment Trust (NYSE:PEI) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Urban Edge Properties and Pennsylvania Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Urban Edge Properties 25.53% 13.43% 4.35%
Pennsylvania Real Estate Investment Trust -16.35% -7.60% -2.34%

Insider and Institutional Ownership

87.3% of Urban Edge Properties shares are owned by institutional investors. Comparatively, 99.0% of Pennsylvania Real Estate Investment Trust shares are owned by institutional investors. 4.7% of Urban Edge Properties shares are owned by company insiders. Comparatively, 4.4% of Pennsylvania Real Estate Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Urban Edge Properties has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Pennsylvania Real Estate Investment Trust has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Urban Edge Properties and Pennsylvania Real Estate Investment Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Urban Edge Properties 1 1 0 0 1.50
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86

Urban Edge Properties currently has a consensus price target of $25.00, suggesting a potential upside of 3.99%. Pennsylvania Real Estate Investment Trust has a consensus price target of $13.92, suggesting a potential upside of 42.01%. Given Pennsylvania Real Estate Investment Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Pennsylvania Real Estate Investment Trust is more favorable than Urban Edge Properties.

Earnings & Valuation

This table compares Urban Edge Properties and Pennsylvania Real Estate Investment Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Urban Edge Properties $325.98 million 8.39 $90.81 million $0.97 24.78
Pennsylvania Real Estate Investment Trust $399.95 million 1.71 -$11.34 million ($1.24) -7.90

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

Dividends

Urban Edge Properties pays an annual dividend of $0.88 per share and has a dividend yield of 3.7%. Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 8.6%. Urban Edge Properties pays out 90.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennsylvania Real Estate Investment Trust pays out -67.7% of its earnings in the form of a dividend. Pennsylvania Real Estate Investment Trust has increased 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.

About Urban Edge Properties

Urban Edge Properties is a real estate investment trust. The Company is focused on managing, developing, redeveloping and acquiring retail real estate in urban communities, in the New York metropolitan region. Urban Edge Properties LP (UELP or the Operating Partnership) serves as its partnership subsidiary and owns, through affiliates, all of its real estate properties and other assets. As of December 31, 2016, its portfolio consisted of 79 shopping centers, three malls and a warehouse park adjacent to one of its centers totaling 14.8 million square feet. As of December 31, 2016, it leased 19 properties under ground and/or building leases. As of December 31, 2016, it had approximately 1,200 leases. Its shopping centers and malls are located at California, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, South Carolina, Virginia and Puerto Rico. Its shopping centers and malls include Signal Hill, Vallejo, Walnut Creek, Newington and others.

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.

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