Tanger Factory Outlet Centers (NYSE: SKT) and National Retail Properties (NYSE:NNN) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Tanger Factory Outlet Centers and National Retail Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tanger Factory Outlet Centers 2 4 2 0 2.00
National Retail Properties 0 2 4 0 2.67

Tanger Factory Outlet Centers presently has a consensus target price of $29.90, indicating a potential upside of 22.84%. National Retail Properties has a consensus target price of $48.20, indicating a potential upside of 14.46%. Given Tanger Factory Outlet Centers’ higher probable upside, equities analysts clearly believe Tanger Factory Outlet Centers is more favorable than National Retail Properties.

Valuation and Earnings

This table compares Tanger Factory Outlet Centers and National Retail Properties’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tanger Factory Outlet Centers $493.28 million 4.69 $276.68 million $1.51 16.12
National Retail Properties $562.72 million 11.17 $500.46 million $1.33 31.66

National Retail Properties has higher revenue and earnings than Tanger Factory Outlet Centers. Tanger Factory Outlet Centers is trading at a lower price-to-earnings ratio than National Retail Properties, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Tanger Factory Outlet Centers has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500. Comparatively, National Retail Properties has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Profitability

This table compares Tanger Factory Outlet Centers and National Retail Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tanger Factory Outlet Centers 29.65% 20.75% 5.66%
National Retail Properties 44.17% 8.22% 4.03%

Institutional & Insider Ownership

96.8% of Tanger Factory Outlet Centers shares are held by institutional investors. Comparatively, 89.4% of National Retail Properties shares are held by institutional investors. 4.8% of Tanger Factory Outlet Centers shares are held by company insiders. Comparatively, 1.0% of National Retail Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Tanger Factory Outlet Centers pays an annual dividend of $1.37 per share and has a dividend yield of 5.6%. National Retail Properties pays an annual dividend of $1.90 per share and has a dividend yield of 4.5%. Tanger Factory Outlet Centers 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. National Retail Properties pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tanger Factory Outlet Centers has increased its dividend for 24 consecutive years and National Retail Properties has increased its dividend for 7 consecutive years. Tanger Factory Outlet Centers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Tanger Factory Outlet Centers beats National Retail Properties on 10 of the 17 factors compared between the two stocks.

Tanger Factory Outlet Centers Company Profile

Tanger Factory Outlet Centers, Inc. is an owner and operator of outlet centers in the United States and Canada. The Company is a fully-integrated, self-administered and self-managed real estate investment trust (REIT), which focuses on developing, acquiring, owning, operating and managing outlet shopping centers. As of December 31, 2016, its portfolio consisted of 36 outlet centers, with a total gross leasable area of approximately 12.7 million square feet, which were 98% occupied and contained over 2,600 stores representing approximately 400 store brands. Its outlet centers and other assets are held by, and all of its operations are conducted by, Tanger Properties Limited Partnership and subsidiaries (Operating Partnership). The Company owns the majority of the units of partnership interest issued by the Operating Partnership, through its subsidiaries, Tanger GP Trust and Tanger LP Trust. Tanger GP Trust controls the Operating Partnership as its sole general partner.

National Retail Properties Company Profile

National Retail Properties, Inc. is a real estate investment trust (REIT). The Company acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment. As of December 31, 2016, it owned 2,535 properties with an aggregate gross leasable area of approximately 27,204,000 square feet, located in 48 states. The Company focuses on investing in a range of property and tenant types; leases, mortgages and other types of real estate interests; loans secured by personal property; loans secured by partnership or membership interests in partnerships or limited liability companies, and securities of other REITs, or other issuers, including for the purpose of exercising control over such entities. The Company owns a portfolio of freestanding retail stores across the United States. It owns approximately 2,290 stores, which are leased to over 400 tenants in approximately 40 different retail categories.

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