DDR (DDR) and National Retail Properties (NNN) Head to Head Contrast

DDR (NYSE: DDR) and National Retail Properties (NYSE:NNN) are both mid-cap financials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Dividends

DDR pays an annual dividend of $0.76 per share and has a dividend yield of 9.1%. National Retail Properties pays an annual dividend of $1.90 per share and has a dividend yield of 4.7%. DDR pays out -165.2% of its earnings in the form of a dividend. National Retail Properties pays out 155.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DDR has raised its dividend for 7 consecutive years and National Retail Properties has raised its dividend for 8 consecutive years. DDR is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

DDR has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, National Retail Properties has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for DDR and National Retail Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DDR 1 9 6 0 2.31
National Retail Properties 0 0 5 0 3.00

DDR currently has a consensus price target of $11.13, suggesting a potential upside of 33.39%. National Retail Properties has a consensus price target of $49.00, suggesting a potential upside of 20.16%. Given DDR’s higher possible upside, equities research analysts plainly believe DDR is more favorable than National Retail Properties.

Profitability

This table compares DDR and National Retail Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DDR 1.11% 3.48% 1.20%
National Retail Properties 44.96% 8.47% 4.08%

Institutional & Insider Ownership

79.9% of DDR shares are owned by institutional investors. Comparatively, 90.6% of National Retail Properties shares are owned by institutional investors. 16.1% of DDR shares are owned by company insiders. Comparatively, 1.0% of National Retail Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares DDR and National Retail Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DDR $969.51 million 3.17 $60.01 million ($0.46) -18.13
National Retail Properties $533.65 million 11.62 $239.50 million $1.22 33.43

National Retail Properties has lower revenue, but higher earnings than DDR. DDR is trading at a lower price-to-earnings ratio than National Retail Properties, indicating that it is currently the more affordable of the two stocks.

Summary

National Retail Properties beats DDR on 10 of the 17 factors compared between the two stocks.

About DDR

DDR Corp. is a self-administered and self-managed real estate investment trust. It operates through two segments: shopping centers and loan investments. It is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers. As of December 31, 2016, it owned and managed approximately 106 million total square feet of gross leasable area (GLA). As of December 31, 2016, the portfolio properties included 319 shopping centers (including 152 centers owned through joint ventures). As of December 31, 2016, the portfolio properties also included over 650 acres of undeveloped land, including parcels located adjacent to certain of the shopping centers. As of December 31, 2016, the portfolio properties aggregated to 75.8 million square feet of Company-owned GLA located in 35 states, plus Puerto Rico. These centers are in the Southeast and Midwest, with significant concentrations in Florida, Georgia, Ohio and North Carolina, as well as Puerto Rico.

About National Retail Properties

National Retail Properties, Inc. is a real estate investment trust (REIT). The Company acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment. As of December 31, 2016, it owned 2,535 properties with an aggregate gross leasable area of approximately 27,204,000 square feet, located in 48 states. The Company focuses on investing in a range of property and tenant types; leases, mortgages and other types of real estate interests; loans secured by personal property; loans secured by partnership or membership interests in partnerships or limited liability companies, and securities of other REITs, or other issuers, including for the purpose of exercising control over such entities. The Company owns a portfolio of freestanding retail stores across the United States. It owns approximately 2,290 stores, which are leased to over 400 tenants in approximately 40 different retail categories.

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