National Retail Properties (NYSE:NNN) and Simon Property Group (NYSE:SPG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.
Institutional & Insider Ownership
89.2% of National Retail Properties shares are held by institutional investors. Comparatively, 88.2% of Simon Property Group shares are held by institutional investors. 0.8% of National Retail Properties shares are held by insiders. Comparatively, 8.9% of Simon Property Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current recommendations for National Retail Properties and Simon Property Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| National Retail Properties | 0 | 4 | 2 | 0 | 2.33 |
| Simon Property Group | 2 | 11 | 5 | 0 | 2.17 |
National Retail Properties presently has a consensus target price of $41.8333, indicating a potential downside of 4.58%. Simon Property Group has a consensus target price of $90.2353, indicating a potential downside of 20.09%. Given National Retail Properties' stronger consensus rating and higher probable upside, equities research analysts plainly believe National Retail Properties is more favorable than Simon Property Group.
Profitability
This table compares National Retail Properties and Simon Property Group's 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% |
| Simon Property Group | 27.22% | 56.28% | 4.12% |
Valuation and Earnings
This table compares National Retail Properties and Simon Property Group's 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 | 11.46 | $299.18 million | $2.76 | 15.88 |
| Simon Property Group | $5.76 billion | 6.00 | $2.10 billion | $12.04 | 9.38 |
Simon Property Group has higher revenue and earnings than National Retail Properties. Simon Property Group 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.
Dividends
National Retail Properties pays an annual dividend of $2.08 per share and has a dividend yield of 4.7%. Simon Property Group pays an annual dividend of $5.20 per share and has a dividend yield of 4.6%. 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. Simon Property Group pays out 43.2% of its earnings in the form of a dividend. National Retail Properties has raised its dividend for 11 consecutive years and Simon Property Group 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.
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, Simon Property Group has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.
Summary
Simon Property Group beats National Retail Properties on 9 of the 17 factors compared between the two stocks.
