Comparing Macerich (MAC) & HCP (HCP)

Macerich (NYSE: MAC) and HCP (NYSE:HCP) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Profitability

This table compares Macerich and HCP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Macerich 4.40% 1.48% 0.61%
HCP -0.41% -0.13% -0.05%

Dividends

Macerich pays an annual dividend of $2.96 per share and has a dividend yield of 5.4%. HCP pays an annual dividend of $1.48 per share and has a dividend yield of 6.3%. Macerich pays out 75.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HCP pays out 75.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Macerich has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a summary of recent ratings for Macerich and HCP, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Macerich 1 9 6 0 2.31
HCP 2 9 4 0 2.13

Macerich presently has a consensus target price of $65.10, suggesting a potential upside of 18.90%. HCP has a consensus target price of $26.93, suggesting a potential upside of 14.49%. Given Macerich’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Macerich is more favorable than HCP.

Risk & Volatility

Macerich has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, HCP has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Institutional & Insider Ownership

95.2% of Macerich shares are held by institutional investors. Comparatively, 89.0% of HCP shares are held by institutional investors. 3.8% of Macerich shares are held by insiders. Comparatively, 0.1% of HCP shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Macerich and HCP’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Macerich $993.66 million 7.77 $146.13 million $3.93 13.93
HCP $1.85 billion 5.98 $414.16 million $1.95 12.06

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

Summary

Macerich beats HCP on 14 of the 17 factors compared between the two stocks.

About Macerich

Macerich, an S&P 500 company, is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. Macerich currently owns 53 million square feet of real estate consisting primarily of interests in 48 regional shopping centers. Macerich specializes in successful retail properties in many of the country's most attractive, densely populated markets with significant presence in the Pacific Rim, Arizona, Chicago, and the New York Metro area to Washington DC corridor. A recognized leader in sustainability, Macerich has earned NAREIT's prestigious "Leader in the Light" award every year from 2014-2017. For the third straight year in 2017 Macerich achieved the #1 GRESB ranking in the North American Retail Sector, among many other environmental accomplishments. Additional information about Macerich can be obtained from the Company's website at www.macerich.com.

About HCP

HCP, Inc. is a fully integrated real estate investment trust (REIT) that invests primarily in real estate serving the healthcare industry in the United States. HCP owns a large-scale portfolio diversified across life science, medical office and senior housing. Recognized as a global leader in sustainability, HCP has been a publicly-traded company since 1985 and was the first healthcare REIT selected to the S&P 500 index. For more information regarding HCP, visit www.hcpi.com.

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