Head to Head Comparison: Four Corners Property Trust (NYSE:FCPT) and Washington Prime Group (WPG)

Washington Prime Group (NYSE: WPG) and Four Corners Property Trust (NYSE:FCPT) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Volatility and Risk

Washington Prime Group has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Four Corners Property Trust has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500.

Institutional and Insider Ownership

89.9% of Washington Prime Group shares are owned by institutional investors. Comparatively, 86.5% of Four Corners Property Trust shares are owned by institutional investors. 0.3% of Washington Prime Group shares are owned by company insiders. Comparatively, 0.2% of Four Corners Property Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Washington Prime Group pays an annual dividend of $1.00 per share and has a dividend yield of 14.2%. Four Corners Property Trust pays an annual dividend of $0.97 per share and has a dividend yield of 3.8%. Washington Prime Group pays out 116.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Four Corners Property Trust pays out 68.8% of its earnings in the form of a dividend.

Profitability

This table compares Washington Prime Group and Four Corners Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Prime Group 21.85% 16.17% 3.57%
Four Corners Property Trust 65.46% 17.37% 8.56%

Valuation and Earnings

This table compares Washington Prime Group and Four Corners Property Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Washington Prime Group $843.47 million 1.56 $67.13 million $0.86 8.21
Four Corners Property Trust $124.02 million 12.66 $156.80 million $1.41 18.19

Four Corners Property Trust has lower revenue, but higher earnings than Washington Prime Group. Washington Prime Group is trading at a lower price-to-earnings ratio than Four Corners Property Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Washington Prime Group and Four Corners Property Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Prime Group 1 0 0 0 1.00
Four Corners Property Trust 0 1 2 0 2.67

Four Corners Property Trust has a consensus price target of $26.67, indicating a potential upside of 3.96%. Given Four Corners Property Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Four Corners Property Trust is more favorable than Washington Prime Group.

Summary

Four Corners Property Trust beats Washington Prime Group on 11 of the 16 factors compared between the two stocks.

Washington Prime Group Company Profile

Washington Prime Group Inc. (WPG Inc.), formerly WP Glimcher Inc., operates as a self-administered and self-managed real estate investment trust (REIT). The Company’s primary business is the ownership, development and management of retail real estate within the United States. The Company owns, develops and manages enclosed retail properties and community centers. As of December 31, 2016, its assets consisted of material interests in 114 shopping centers in the United States, consisting of approximately 63 million square feet of gross leasable area. The Company also owns parcels of land, which can be used for either the development of new shopping centers or the expansion of existing properties. Washington Prime Group, L.P. is the Company’s majority-owned partnership subsidiary that owns, develops and manages, through its affiliates, all of WPG Inc.’s real estate properties and other assets. Its properties include Irving Mall, Lindale Mall, Markland Plaza and Royal Eagle Plaza.

Four Corners Property Trust Company Profile

Four Corners Property Trust, Inc. is a self-administered company and real estate investment trust (REIT), which owns, acquires and leases properties for use in the restaurant and food service related industries. The Company operates through two segments: real estate operations and restaurant operations. Its real estate operations segment consists of rental revenues primarily generated by leasing restaurant properties to tenants through triple-net lease arrangements under which the tenant is primarily responsible for ongoing costs relating to the properties. Its restaurant operations segment is conducted through its taxable REIT subsidiary, Kerrow Holdings, LLC, and consists of its Kerrow Restaurant Operating Business. As of December 31, 2016, it had owned 481 properties, all within the continental United States. Of these properties, 475 were held for investment and leased to tenants under triple-net leases and had an aggregate leasable area of approximately 3.4 million square feet.

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