National Retail Properties (NYSE:NNN) and Tanger Factory Outlet Centers (NYSE:SKT) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.
Dividends
National Retail Properties pays an annual dividend of $2.08 per share and has a dividend yield of 4.5%. Tanger Factory Outlet Centers pays an annual dividend of $0.71 per share and has a dividend yield of 4.2%. National Retail Properties pays out 75.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tanger Factory Outlet Centers pays out 31.3% of its earnings in the form of a dividend. National Retail Properties has raised its dividend for 11 consecutive years and Tanger Factory Outlet Centers has raised its dividend for 1 consecutive years. National Retail Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares National Retail Properties and Tanger Factory Outlet Centers' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| National Retail Properties | $670.49 million | 11.98 | $299.18 million | $2.76 | 16.57 |
| Tanger Factory Outlet Centers | $478.35 million | 3.57 | $87.86 million | $2.27 | 7.46 |
National Retail Properties has higher revenue and earnings than Tanger Factory Outlet Centers. Tanger Factory Outlet Centers 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.
Insider and Institutional Ownership
89.2% of National Retail Properties shares are owned by institutional investors. Comparatively, 73.5% of Tanger Factory Outlet Centers shares are owned by institutional investors. 0.8% of National Retail Properties shares are owned by insiders. Comparatively, 2.2% of Tanger Factory Outlet Centers shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares National Retail Properties and Tanger Factory Outlet Centers' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| National Retail Properties | 35.97% | 6.09% | 3.18% |
| Tanger Factory Outlet Centers | -0.76% | -0.82% | -0.12% |
Analyst Ratings
This is a summary of current ratings and recommmendations for National Retail Properties and Tanger Factory Outlet Centers, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| National Retail Properties | 0 | 3 | 4 | 0 | 2.57 |
| Tanger Factory Outlet Centers | 2 | 3 | 0 | 0 | 1.60 |
National Retail Properties presently has a consensus price target of $44.50, indicating a potential downside of 2.71%. Tanger Factory Outlet Centers has a consensus price target of $9.25, indicating a potential downside of 45.40%. Given National Retail Properties' stronger consensus rating and higher possible upside, analysts clearly believe National Retail Properties is more favorable than Tanger Factory Outlet Centers.
Risk and Volatility
National Retail Properties has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Tanger Factory Outlet Centers has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500.
Summary
National Retail Properties beats Tanger Factory Outlet Centers on 14 of the 17 factors compared between the two stocks.
