Financial Analysis: General Growth Properties (GGP) & Cedar Realty Trust (CDR)

Cedar Realty Trust (NYSE: CDR) and General Growth Properties (NYSE:GGP) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares Cedar Realty Trust and General Growth Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cedar Realty Trust 6.58% 2.49% 0.77%
General Growth Properties 50.01% 13.57% 5.07%

Earnings and Valuation

This table compares Cedar Realty Trust and General Growth Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cedar Realty Trust $147.44 million 3.20 $81.98 million ($0.06) -95.65
General Growth Properties $2.51 billion 7.53 $1.76 billion $1.19 18.03

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

Dividends

Cedar Realty Trust pays an annual dividend of $0.20 per share and has a dividend yield of 3.5%. General Growth Properties pays an annual dividend of $0.88 per share and has a dividend yield of 4.1%. Cedar Realty Trust pays out -333.3% of its earnings in the form of a dividend. General Growth Properties pays out 73.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cedar Realty Trust has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

92.2% of Cedar Realty Trust shares are owned by institutional investors. Comparatively, 95.2% of General Growth Properties shares are owned by institutional investors. 4.5% of Cedar Realty Trust shares are owned by insiders. Comparatively, 35.6% of General Growth Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Cedar Realty Trust and General Growth Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cedar Realty Trust 1 2 3 0 2.33
General Growth Properties 1 5 4 0 2.30

Cedar Realty Trust presently has a consensus target price of $6.25, indicating a potential upside of 8.89%. General Growth Properties has a consensus target price of $24.80, indicating a potential upside of 15.62%. Given General Growth Properties’ higher probable upside, analysts clearly believe General Growth Properties is more favorable than Cedar Realty Trust.

Risk & Volatility

Cedar Realty Trust has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, General Growth Properties has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Summary

General Growth Properties beats Cedar Realty Trust on 13 of the 17 factors compared between the two stocks.

About Cedar Realty Trust

Cedar Realty Trust, Inc. is a real estate investment trust (REIT). The Company focuses on ownership and operation of grocery-anchored shopping centers straddling the Washington District of Columbia (DC) to Boston corridor. As of December 31, 2016, the Company owned and managed a portfolio of 61 operating properties (excluding properties held for sale) totaling approximately 9.1 million square feet of gross leasable area (GLA). The Company focuses its investment activities on grocery-anchored shopping centers. The Company’s properties portfolio comprises 26 properties in Pennsylvania, eight properties in Massachusetts, seven properties in Connecticut, seven properties in Maryland / Washington, D.C, eight properties in Virginia, four properties in New Jersey and one property in New York. The Company’s 106 are going to expire in the year 2017. The Company conducts all of its businesses through the Cedar Realty Trust Partnership L.P. (the Operating Partnership).

About General Growth Properties

GGP Inc. (GGP), formerly General Growth Properties, Inc., is a self-administered and self-managed real estate investment trust (REIT). The Company operates as a holding company, which is engaged in the operation, development and management of retail and other rental properties, primarily regional malls. As of December 31, 2016, the Company owned, either entirely or with joint venture partners, 127 retail properties located throughout the United States comprising approximately 125 million square feet of gross leasable area (GLA). As of December 31, 2016, the Company’s retail properties included 200 Lafayette, The Shoppes at Buckland Hills, Northridge Fashion Center, Brass Mill Center, Jordan Creek Town Center, Westroads Mall and Stonestown Galleria. The Company’s business is conducted through GGP Operating Partnership, LP (GGPOP), GGP Nimbus, LP (GGPN) and GGP Limited Partnership (GGPLP, and together with GGPN and GGPOP, the Operating Partnerships), subsidiaries of GGP.

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