Head-To-Head Analysis: Washington Prime Group (WPG) versus Taubman Centers (TCO)

Washington Prime Group (NYSE: WPG) and Taubman Centers (NYSE:TCO) are both financials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Risk and Volatility

Washington Prime Group has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Taubman Centers has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Earnings & Valuation

This table compares Washington Prime Group and Taubman Centers’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Washington Prime Group $843.47 million 1.52 $67.13 million $0.72 9.58
Taubman Centers $612.56 million 6.05 $132.61 million $1.05 58.14

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

Analyst Recommendations

This is a breakdown of recent recommendations for Washington Prime Group and Taubman Centers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Prime Group 1 0 0 0 1.00
Taubman Centers 1 6 1 0 2.00

Taubman Centers has a consensus price target of $63.67, suggesting a potential upside of 4.29%. Given Taubman Centers’ stronger consensus rating and higher possible upside, analysts plainly believe Taubman Centers is more favorable than Washington Prime Group.

Insider & Institutional Ownership

89.8% of Washington Prime Group shares are held by institutional investors. 0.3% of Washington Prime Group shares are held by company insiders. Comparatively, 31.2% of Taubman Centers shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Washington Prime Group and Taubman Centers’ 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%
Taubman Centers 13.21% -75.87% 2.03%

Dividends

Washington Prime Group pays an annual dividend of $1.00 per share and has a dividend yield of 14.5%. Taubman Centers pays an annual dividend of $2.50 per share and has a dividend yield of 4.1%. Washington Prime Group pays out 138.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Taubman Centers pays out 238.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Washington Prime Group has raised its dividend for 8 consecutive years. Washington Prime Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Washington Prime Group beats Taubman Centers on 9 of the 17 factors compared between the two stocks.

About Washington Prime Group

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.

About Taubman Centers

Taubman Centers, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company’s segment is focused on owning, developing and managing regional shopping centers. The Taubman Realty Group Limited Partnership (the Operating Partnership or TRG) is majority-owned partnership subsidiary of the Company that owns direct or indirect interests in all of its real estate properties. The Company owns, leases, acquires, disposes of, develops, expands and manages regional and super-regional shopping centers and interests therein. Its owned portfolio of operating centers as of December 31, 2016 consisted of 23 urban and suburban shopping centers operating in 11 the United States states, Puerto Rico, South Korea, and China. The consolidated businesses consist of shopping centers and entities that are controlled by ownership or contractual agreements, The Taubman Company LLC (Manager), and Taubman Properties Asia LLC and its subsidiaries (Taubman Asia).

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