Analyzing Pennsylvania Real Estate Investment Trust (NYSE:PEI) and Weingarten Realty Investors (WRI)

Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Weingarten Realty Investors (NYSE:WRI) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitabiliy.

Insider & Institutional Ownership

96.0% of Pennsylvania Real Estate Investment Trust shares are owned by institutional investors. Comparatively, 80.0% of Weingarten Realty Investors shares are owned by institutional investors. 4.4% of Pennsylvania Real Estate Investment Trust shares are owned by company insiders. Comparatively, 7.3% of Weingarten Realty Investors shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Pennsylvania Real Estate Investment Trust and Weingarten Realty Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -18.13% -9.05% -2.66%
Weingarten Realty Investors 33.57% 11.03% 4.36%

Analyst Ratings

This is a summary of recent recommendations for Pennsylvania Real Estate Investment Trust and Weingarten Realty Investors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 1 4 0 0 1.80
Weingarten Realty Investors 1 3 1 0 2.00

Pennsylvania Real Estate Investment Trust presently has a consensus price target of $15.88, suggesting a potential upside of 41.11%. Weingarten Realty Investors has a consensus price target of $37.00, suggesting a potential upside of 11.99%. Given Pennsylvania Real Estate Investment Trust’s higher probable upside, equities analysts plainly believe Pennsylvania Real Estate Investment Trust is more favorable than Weingarten Realty Investors.

Earnings and Valuation

This table compares Pennsylvania Real Estate Investment Trust and Weingarten Realty Investors’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $394.45 million 1.99 $216.81 million ($1.31) -8.59
Weingarten Realty Investors $571.15 million 7.43 $367.56 million $1.47 22.48

Weingarten Realty Investors has higher revenue and earnings than Pennsylvania Real Estate Investment Trust. Pennsylvania Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Weingarten Realty Investors, indicating that it is currently the more affordable of the two stocks.

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.5%. Weingarten Realty Investors pays an annual dividend of $1.54 per share and has a dividend yield of 4.7%. Pennsylvania Real Estate Investment Trust pays out -64.1% of its earnings in the form of a dividend. Weingarten Realty Investors pays out 104.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennsylvania Real Estate Investment Trust has increased its dividend for 5 consecutive years and Weingarten Realty Investors has increased its dividend for 7 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Pennsylvania Real Estate Investment Trust has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Weingarten Realty Investors has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Summary

Weingarten Realty Investors beats Pennsylvania Real Estate Investment Trust on 12 of the 17 factors compared between the two stocks.

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust (PREIT) is a self-managed and self-administered real estate investment trust (REIT). The Company’s primary business is owning and operating retail shopping malls, which it does primarily through operating partnership, PREIT Associates, L.P. (PREIT Associates). The Company is engaged in the ownership, management, leasing, acquisition, redevelopment, development and disposition of shopping malls. The Company has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of December 31, 2016, the Company owned interests in 30 retail properties, of which 26 are operating properties and four are development or redevelopment properties. As of December 31, 2016, the Company’s 26 operating properties included 22 shopping malls and four other retail properties, had a total of 21.7 million square feet and were located in nine states.

About Weingarten Realty Investors

Weingarten Realty Investors is a real estate investment trust (REIT). The Company’s primary business is leasing space to tenants in the shopping centers it owns or leases. The Company also provides property management services. The Company is in the business of owning, managing and developing retail shopping centers. As of December 31, 2016, the Company had owned or operated under long-term leases, either directly or through its interest in real estate joint ventures or partnerships, a total of 220 centers, primarily neighborhood and community shopping centers, which were located in 18 states spanning the country from coast to coast with approximately 44.7 million square feet of gross leasable area. Its centers are located principally in the South, West Coast and Southeast Coast of the United States with concentrations in Arizona, California, Florida and Texas. It also owned interests in 28 parcels of land that totaled approximately 19.8 million square feet, as of December 31, 2016.

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