Financial Analysis: American Assets Trust (AAT) & Excel Trust (EXL)

American Assets Trust (NYSE: AAT) and Excel Trust (NYSE:EXL) are both small-cap financials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Institutional & Insider Ownership

98.1% of American Assets Trust shares are owned by institutional investors. 34.2% of American Assets Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

American Assets Trust pays an annual dividend of $1.08 per share and has a dividend yield of 3.0%. Excel Trust does not pay a dividend. American Assets Trust pays out 161.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for American Assets Trust and Excel Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Assets Trust 0 2 1 0 2.33
Excel Trust 0 0 0 0 N/A

American Assets Trust presently has a consensus target price of $43.67, indicating a potential upside of 22.69%. Given American Assets Trust’s higher probable upside, equities analysts clearly believe American Assets Trust is more favorable than Excel Trust.

Earnings and Valuation

This table compares American Assets Trust and Excel Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Assets Trust $295.09 million 5.68 $45.63 million $0.67 53.12
Excel Trust N/A N/A N/A $0.26 60.92

American Assets Trust has higher revenue and earnings than Excel Trust. American Assets Trust is trading at a lower price-to-earnings ratio than Excel Trust, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

American Assets Trust has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Excel Trust has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Profitability

This table compares American Assets Trust and Excel Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Assets Trust 10.90% 3.97% 1.58%
Excel Trust 9.45% 0.65% 0.88%

Summary

American Assets Trust beats Excel Trust on 11 of the 13 factors compared between the two stocks.

About American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust (REIT). The Company owns, operates, acquires and develops retail, office, multifamily and mixed-use properties in Southern California, Northern California, Oregon, Washington, Texas and Hawaii markets. The Company operates in four business segments: retail, office, multifamily and mixed-use. As of December 31, 2016, the Company’s portfolio consisted of 11 retail shopping centers; seven office properties; a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center, and five multifamily properties. Additionally, as of December 31, 2016, the Company owned land at four of its properties that it classified as held for development and construction in progress. The Company’s markets include San Diego, the San Francisco Bay Area, Portland, Oregon, Bellevue, Washington and Oahu, Hawaii.

About Excel Trust

Excel Trust, Inc. is a real estate investment trust (REIT). The Company is a vertically integrated, self-administered, self-managed real estate firm with the principal objective of acquiring, financing, developing, leasing, owning and managing community and power centers, grocery anchored neighborhood centers and freestanding retail properties. It operates through three segments: retail properties, multi-family properties and office properties. It owns approximately 38 consolidated retail operating properties with a total of approximately 7.2 million square feet of gross leasable area (GLA). The multi-family segment consists of apartment units at one retail property, West Broad Village, which is located in Richmond, Virginia. The office segment consists of two properties, Excel Centre, a portion of which is utilized as its headquarters, and the Promenade Corporate Center. These office properties total approximately 338,339 square feet of GLA.

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