Critical Review: Urban Edge Properties (NYSE:UE) versus Realty Income (NYSE:O)

Realty Income (NYSE:O) and Urban Edge Properties (NYSE:UE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Risk & Volatility

Realty Income has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Urban Edge Properties has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Dividends

Realty Income pays an annual dividend of $3.24 per share and has a dividend yield of 4.9%. Urban Edge Properties pays an annual dividend of $0.76 per share and has a dividend yield of 3.6%. Realty Income pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Urban Edge Properties pays out 101.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income has raised its dividend for 1 consecutive years and Urban Edge Properties has raised its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Realty Income and Urban Edge Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Realty Income	$5.55 billion	10.96	$860.77 million	$1.08	61.20
Urban Edge Properties	$471.93 million	5.61	$93.54 million	$0.75	28.01

Realty Income has higher revenue and earnings than Urban Edge Properties. Urban Edge Properties is trading at a lower price-to-earnings ratio than Realty Income, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Realty Income and Urban Edge Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Realty Income	17.17%	2.45%	1.37%
Urban Edge Properties	19.82%	6.79%	2.82%

Institutional and Insider Ownership

70.8% of Realty Income shares are held by institutional investors. Comparatively, 94.9% of Urban Edge Properties shares are held by institutional investors. 0.1% of Realty Income shares are held by insiders. Comparatively, 2.4% of Urban Edge Properties 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Realty Income and Urban Edge Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Realty Income	1	10	5	0	2.25
Urban Edge Properties	0	5	1	0	2.17

Realty Income presently has a consensus target price of $63.21, suggesting a potential downside of 4.36%. Urban Edge Properties has a consensus target price of $22.00, suggesting a potential upside of 4.74%. Given Urban Edge Properties’ higher possible upside, analysts clearly believe Urban Edge Properties is more favorable than Realty Income.

Summary

Urban Edge Properties beats Realty Income on 9 of the 17 factors compared between the two stocks.

About Realty Income

Realty Income, The Monthly Dividend Company, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a real estate investment trust (“REIT”), and its monthly dividends are supported by the cash flow from over 15,450 real estate properties (including properties acquired in the Spirit merger in January 2024) primarily owned under long-term net lease agreements with commercial clients. To date, the company has declared 644 consecutive monthly dividends on its shares of common stock throughout its 55-year operating history and increased the dividend 123 times since Realty Income’s public listing in 1994 (NYSE: O).

About Urban Edge Properties

Urban Edge Properties is a NYSE listed real estate investment trust focused on owning, managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the Washington, D.C. to Boston corridor. Urban Edge owns 76 properties totaling 17.1 million square feet of gross leasable area.