Analyzing Wheeler Real Estate Investment Trust (WHLR) and Simon Property Group (SPG)

Wheeler Real Estate Investment Trust (NASDAQ: WHLR) and Simon Property Group (NYSE:SPG) are both retail reits companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Dividends

Wheeler Real Estate Investment Trust pays an annual dividend of $1.36 per share and has a dividend yield of 13.7%. Simon Property Group pays an annual dividend of $7.40 per share and has a dividend yield of 4.6%. Wheeler Real Estate Investment Trust pays out -67.0% of its earnings in the form of a dividend. Simon Property Group pays out 130.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Wheeler Real Estate Investment Trust has raised its dividend for 7 consecutive years. Wheeler Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Wheeler Real Estate Investment Trust has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Simon Property Group has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Wheeler Real Estate Investment Trust and Simon Property Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wheeler Real Estate Investment Trust 0 2 4 0 2.67
Simon Property Group 0 5 10 0 2.67

Wheeler Real Estate Investment Trust presently has a consensus target price of $15.40, indicating a potential upside of 55.09%. Simon Property Group has a consensus target price of $192.33, indicating a potential upside of 18.76%. Given Wheeler Real Estate Investment Trust’s higher possible upside, research analysts clearly believe Wheeler Real Estate Investment Trust is more favorable than Simon Property Group.

Insider and Institutional Ownership

68.3% of Wheeler Real Estate Investment Trust shares are held by institutional investors. Comparatively, 95.2% of Simon Property Group shares are held by institutional investors. 5.3% of Wheeler Real Estate Investment Trust shares are held by insiders. Comparatively, 8.4% of Simon Property Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Wheeler Real Estate Investment Trust and Simon Property Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wheeler Real Estate Investment Trust -13.61% -16.99% -1.92%
Simon Property Group 31.96% 41.85% 6.09%

Earnings & Valuation

This table compares Wheeler Real Estate Investment Trust and Simon Property Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Wheeler Real Estate Investment Trust $44.16 million 1.96 -$11.20 million ($2.03) -4.89
Simon Property Group $5.44 billion 19.06 $1.84 billion $5.66 28.61

Simon Property Group has higher revenue and earnings than Wheeler Real Estate Investment Trust. Wheeler Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Simon Property Group, indicating that it is currently the more affordable of the two stocks.

Summary

Simon Property Group beats Wheeler Real Estate Investment Trust on 11 of the 16 factors compared between the two stocks.

About Wheeler Real Estate Investment Trust

Wheeler Real Estate Investment Trust, Inc. is a self-managed commercial real estate investment company. The Company focuses on acquiring and managing retail properties with a primary focus on grocery-anchored centers. As of December 31, 2016, the Company owned a portfolio consisting of 74 properties, including 59 retail shopping centers and five freestanding retail properties totaling 4,906,511 gross leasable square feet of which approximately 94% were leased, one office property, eight undeveloped land parcels totaling approximately 70 acres and one redevelopment project. Its properties are located in Virginia, North Carolina, South Carolina, Florida, Georgia, Kentucky, Oklahoma, Tennessee, Alabama, New Jersey, Pennsylvania and West Virginia. Its properties include Alex City Marketplace, Berkley Shopping Center, Clover Plaza, Darien Shopping Center, Cypress Shopping Center, Harrodsburg Marketplace, LaGrange Marketplace, Riverbridge Shopping Center and Village of Martinsville.

About Simon Property Group

Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. Simon Property Group, L.P. (Operating Partnership), is the Company’s partnership subsidiary that owns all of its real estate properties and other assets. As of December 31, 2016, the Company owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 Premium Outlets, 14 Mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. As of December 31, 2016, it had redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at 27 properties in the United States and it had one outlet and one other retail project under development.

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