Urban Edge Properties (NYSE: UE) and Retail Properties of America (NYSE:RPAI) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Insider and Institutional Ownership

87.2% of Urban Edge Properties shares are owned by institutional investors. Comparatively, 79.0% of Retail Properties of America shares are owned by institutional investors. 4.7% of Urban Edge Properties shares are owned by insiders. Comparatively, 0.4% of Retail Properties of America shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Urban Edge Properties and Retail Properties of America’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Urban Edge Properties $379.02 million 7.11 $230.14 million $1.01 24.79
Retail Properties of America $565.53 million 5.52 $351.03 million $0.80 16.94

Retail Properties of America has higher revenue and earnings than Urban Edge Properties. Retail Properties of America 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 3.5%. Retail Properties of America pays an annual dividend of $0.66 per share and has a dividend yield of 4.9%. Urban Edge Properties pays out 87.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Properties of America pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Properties of America is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Urban Edge Properties and Retail Properties of America, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Urban Edge Properties 1 0 0 0 1.00
Retail Properties of America 0 4 2 0 2.33

Urban Edge Properties presently has a consensus target price of $25.00, indicating a potential downside of 0.16%. Retail Properties of America has a consensus target price of $15.90, indicating a potential upside of 17.34%. Given Retail Properties of America’s stronger consensus rating and higher possible upside, analysts plainly believe Retail Properties of America is more favorable than Urban Edge Properties.

Profitability

This table compares Urban Edge Properties and Retail Properties of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Urban Edge Properties 27.04% 16.72% 4.87%
Retail Properties of America 34.57% 9.20% 4.44%

Volatility & Risk

Urban Edge Properties has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, Retail Properties of America has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500.

Urban Edge Properties Company Profile

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.

Retail Properties of America Company Profile

Retail Properties of America, Inc. is a real estate investment trust (REIT). The Company owns and operates shopping centers located in the United States. As of December 31, 2016, it owned 156 retail operating properties representing 25,832,000 square feet of gross leasable area (GLA). Its retail operating portfolio includes neighborhood and community centers, power centers, and lifestyle centers and multi-tenant retail-focused mixed-use properties, as well as single-user retail properties. As of December 31, 2016, it had identified 10 target markets, including Dallas, Washington, District of Columbia/Baltimore, New York, Atlanta, Seattle, Chicago, Houston, San Antonio, Phoenix and Austin. Its properties include 23rd Street Plaza, Azalea Square I, Boulevard Plaza, Brown’s Lane, Cranberry Square, Denton Crossing, Dorman Center I & II, Edgemont Town Center, Edwards Multiplex, Green’s Corner, Home Depot Plaza, Lake Mary Pointe, Lincoln Park, University Town Center and Winchester Commons.

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