Pennsylvania Real Estate Investment Trust (PEI) versus Ramco-Gershenson Properties Trust (RPT) Financial Survey

Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Ramco-Gershenson Properties Trust (NYSE:RPT) are both small-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.

Volatility & Risk

Pennsylvania Real Estate Investment Trust has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Ramco-Gershenson Properties Trust has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Earnings and Valuation

This table compares Pennsylvania Real Estate Investment Trust and Ramco-Gershenson Properties Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $399.95 million 2.05 -$11.34 million ($1.24) -9.46
Ramco-Gershenson Properties Trust $260.93 million 4.18 $59.66 million $0.59 23.27

Ramco-Gershenson Properties Trust has lower revenue, but higher earnings than Pennsylvania Real Estate Investment Trust. Pennsylvania Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Ramco-Gershenson Properties Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Pennsylvania Real Estate Investment Trust and Ramco-Gershenson Properties Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 2 5 0 0 1.71
Ramco-Gershenson Properties Trust 1 5 4 0 2.30

Pennsylvania Real Estate Investment Trust currently has a consensus price target of $12.17, suggesting a potential upside of 3.72%. Ramco-Gershenson Properties Trust has a consensus price target of $14.86, suggesting a potential upside of 8.21%. Given Ramco-Gershenson Properties Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Ramco-Gershenson Properties Trust is more favorable than Pennsylvania Real Estate Investment Trust.

Profitability

This table compares Pennsylvania Real Estate Investment Trust and Ramco-Gershenson Properties Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -16.35% -7.60% -2.34%
Ramco-Gershenson Properties Trust 20.75% 6.96% 2.55%

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.2%. Ramco-Gershenson Properties Trust pays an annual dividend of $0.88 per share and has a dividend yield of 6.4%. Pennsylvania Real Estate Investment Trust pays out -67.7% of its earnings in the form of a dividend. Ramco-Gershenson Properties Trust pays out 149.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ramco-Gershenson Properties Trust has increased its dividend for 5 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Ramco-Gershenson Properties Trust beats Pennsylvania Real Estate Investment Trust on 11 of the 15 factors compared between the two stocks.

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust (PREIT) is a self-managed and self-administered real estate investment trust (REIT). The Company’s primary business is owning and operating retail shopping malls, which it does primarily through operating partnership, PREIT Associates, L.P. (PREIT Associates). The Company is engaged in the ownership, management, leasing, acquisition, redevelopment, development and disposition of shopping malls. The Company has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of December 31, 2016, the Company owned interests in 30 retail properties, of which 26 are operating properties and four are development or redevelopment properties. As of December 31, 2016, the Company’s 26 operating properties included 22 shopping malls and four other retail properties, had a total of 21.7 million square feet and were located in nine states.

About Ramco-Gershenson Properties Trust

Ramco-Gershenson Properties Trust is an equity real estate investment trust. The Company’s primary business is the ownership, management, redevelopment, development and operation of retail shopping centers. As of December 31, 2016, it owned and managed multi-anchored shopping centers in 12 metropolitan markets in the United States. It conducts its business through its operating partnership, Ramco-Gershenson Properties, L.P. It invests in large, multi-anchored shopping centers that include national chain store tenants and supermarket tenants. National chain anchor tenants in its centers include, among others, Bed Bath and Beyond, Dick’s Sporting Goods, and Home Depot. Supermarket anchor tenants in its centers include, among others, Publix Super Market, Whole Foods, Kroger and Sprouts. Its shopping centers are located in metropolitan markets, such as Metro Detroit, Southeast Florida, Greater Denver, Cincinnati, St. Louis, Jacksonville, Tampa/Lakeland, Milwaukee, Chicago and Atlanta.

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