Reviewing DDR (DDR) & Brixmor Property Group (BRX)

DDR (NYSE: DDR) and Brixmor Property Group (NYSE:BRX) are both mid-cap financials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Dividends

DDR pays an annual dividend of $0.76 per share and has a dividend yield of 8.9%. Brixmor Property Group pays an annual dividend of $1.10 per share and has a dividend yield of 6.4%. DDR pays out -165.2% of its earnings in the form of a dividend. Brixmor Property Group pays out 103.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DDR has increased its dividend for 7 consecutive years and Brixmor Property Group has increased its dividend for 2 consecutive years. DDR is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

79.9% of DDR shares are held by institutional investors. Comparatively, 98.3% of Brixmor Property Group shares are held by institutional investors. 16.1% of DDR shares are held by company insiders. Comparatively, 0.3% of Brixmor Property Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

DDR has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Brixmor Property Group has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Valuation and Earnings

This table compares DDR and Brixmor Property Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DDR $969.51 million 3.25 $60.01 million ($0.46) -18.61
Brixmor Property Group $1.28 billion 4.13 $275.62 million $1.06 16.28

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

Profitability

This table compares DDR and Brixmor Property Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DDR 1.11% 3.48% 1.20%
Brixmor Property Group 25.14% 11.08% 3.48%

Analyst Ratings

This is a summary of current ratings and target prices for DDR and Brixmor Property Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DDR 1 9 6 0 2.31
Brixmor Property Group 0 7 3 0 2.30

DDR presently has a consensus price target of $11.21, indicating a potential upside of 30.94%. Brixmor Property Group has a consensus price target of $21.38, indicating a potential upside of 23.84%. Given DDR’s stronger consensus rating and higher probable upside, research analysts plainly believe DDR is more favorable than Brixmor Property Group.

Summary

Brixmor Property Group beats DDR on 9 of the 17 factors compared between the two stocks.

DDR Company Profile

DDR Corp. is a self-administered and self-managed real estate investment trust. It operates through two segments: shopping centers and loan investments. It is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers. As of December 31, 2016, it owned and managed approximately 106 million total square feet of gross leasable area (GLA). As of December 31, 2016, the portfolio properties included 319 shopping centers (including 152 centers owned through joint ventures). As of December 31, 2016, the portfolio properties also included over 650 acres of undeveloped land, including parcels located adjacent to certain of the shopping centers. As of December 31, 2016, the portfolio properties aggregated to 75.8 million square feet of Company-owned GLA located in 35 states, plus Puerto Rico. These centers are in the Southeast and Midwest, with significant concentrations in Florida, Georgia, Ohio and North Carolina, as well as Puerto Rico.

Brixmor Property Group Company Profile

Brixmor Property Group Inc. is an internally managed real estate investment trust. The Company conducts its operations primarily through Brixmor Operating Partnership LP and subsidiaries (collectively, the Operating Partnership). As of December 31, 2016, it owned interests in 512 shopping centers (the Portfolio) with approximately 86 million square feet of gross leasable area (GLA), including 511 shopping centers and one shopping center held through an unconsolidated joint venture. With an average shopping center size of 167,982 square feet as of December 31, 2016, the Company’s portfolio consisted predominantly of community and neighborhood shopping centers. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Texas, Florida, California, New York, Illinois, Georgia, New Jersey, Ohio, North Carolina, Michigan, Connecticut, Tennessee, Kentucky, Colorado, Arizona, Delaware, West Virginia, Vermont, Maine, Oklahoma and New Mexico.

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