Analyzing Acadia Realty Trust (AKR) & Pennsylvania Real Estate Investment Trust (PEI)

Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Acadia Realty Trust (NYSE:AKR) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Analyst Recommendations

This is a summary of recent ratings for Pennsylvania Real Estate Investment Trust and Acadia Realty Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86
Acadia Realty Trust 0 1 3 0 2.75

Pennsylvania Real Estate Investment Trust presently has a consensus target price of $14.08, suggesting a potential upside of 31.62%. Acadia Realty Trust has a consensus target price of $33.50, suggesting a potential upside of 11.15%. Given Pennsylvania Real Estate Investment Trust’s higher probable upside, equities analysts clearly believe Pennsylvania Real Estate Investment Trust is more favorable than Acadia Realty Trust.

Institutional & Insider Ownership

99.3% of Pennsylvania Real Estate Investment Trust shares are owned by institutional investors. 4.4% of Pennsylvania Real Estate Investment Trust shares are owned by insiders. Comparatively, 1.7% of Acadia Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.9%. Acadia Realty Trust pays an annual dividend of $1.04 per share and has a dividend yield of 3.5%. Pennsylvania Real Estate Investment Trust pays out -64.1% of its earnings in the form of a dividend. Acadia Realty Trust pays out 162.5% 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 raised its dividend for 5 consecutive years and Acadia Realty Trust has raised its dividend for 4 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Pennsylvania Real Estate Investment Trust -18.13% -9.06% -2.66%
Acadia Realty Trust 23.63% 2.50% 1.37%

Earnings and Valuation

This table compares Pennsylvania Real Estate Investment Trust and Acadia Realty Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pennsylvania Real Estate Investment Trust $392.34 million 1.90 $217.76 million ($1.31) -8.17
Acadia Realty Trust $251.17 million 10.04 $140.01 million $0.64 47.09

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

Volatility and Risk

Pennsylvania Real Estate Investment Trust has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Acadia Realty Trust has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Summary

Pennsylvania Real Estate Investment Trust beats Acadia Realty Trust on 9 of the 16 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 Acadia Realty Trust

Acadia Realty Trust is a real estate investment trust. The Company is focused on the ownership, acquisition, development and management of retail properties located in the United States. It operates through three segments: Core Portfolio, Funds and Structured Financing. Core Portfolio and Fund properties primarily consist of street and urban retail, and dense suburban shopping centers. Funds holds primarily retail real estate in which it co-invests with institutional investors. Structured Financing consists of earnings and expenses related to notes and mortgages receivable, which are held within the Core Portfolio or the Funds. As of December 31, 2016, it had ownership interests in 182 properties within its core portfolio. In the Core Portfolio segment, the Company owned an interest in a 311,000 square foot shopping center, a 28,000 square foot retail and an interest in an 87,000 square foot retail property, among others, as of December 31, 2016.

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