Tanger (NYSE:SKT – Get Free Report) and Realty Income (NYSE:O – Get Free Report) are both real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.
Dividends
Tanger pays an annual dividend of $1.25 per share and has a dividend yield of 3.4%. Realty Income pays an annual dividend of $3.26 per share and has a dividend yield of 5.7%. Tanger pays out 113.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income pays out 238.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tanger has raised its dividend for 4 consecutive years and Realty Income has raised its dividend for 31 consecutive years. Realty Income is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Tanger has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Realty Income has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.
Earnings and Valuation
This table compares Tanger and Realty Income”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Tanger | $612.31 million | 6.95 | $114.78 million | $1.10 | 33.70 |
| Realty Income | $5.75 billion | 9.42 | $1.06 billion | $1.37 | 41.76 |
Realty Income has higher revenue and earnings than Tanger. Tanger is trading at a lower price-to-earnings ratio than Realty Income, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Tanger and Realty Income’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tanger | 20.74% | 17.72% | 4.62% |
| Realty Income | 20.93% | 3.12% | 1.72% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Tanger and Realty Income, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tanger | 1 | 7 | 2 | 0 | 2.10 |
| Realty Income | 1 | 8 | 7 | 2 | 2.56 |
Tanger currently has a consensus target price of $40.17, suggesting a potential upside of 8.37%. Realty Income has a consensus target price of $72.34, suggesting a potential upside of 26.43%. Given Realty Income’s stronger consensus rating and higher possible upside, analysts clearly believe Realty Income is more favorable than Tanger.
Institutional & Insider Ownership
85.2% of Tanger shares are held by institutional investors. Comparatively, 70.8% of Realty Income shares are held by institutional investors. 3.2% of Tanger shares are held by insiders. Comparatively, 0.1% of Realty Income shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
Realty Income beats Tanger on 12 of the 18 factors compared between the two stocks.
About Tanger
Tanger Inc. (NYSE: SKT) is a leading owner and operator of outlet and open-air retail shopping destinations, with over 43 years of expertise in the retail and outlet shopping industries. Tanger’s portfolio of 38 outlet centers, one adjacent managed center and one open-air lifestyle center comprises over 15 million square feet well positioned across tourist destinations and vibrant markets in 20 U.S. states and Canada. A publicly traded REIT since 1993, Tanger continues to innovate the retail experience for its shoppers with over 3,000 stores operated by more than 700 different brand name companies. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission (“SEC”) that includes a supplemental information package for the quarter and year ended December 31, 2023.
About Realty Income
Realty Income, The Monthly Dividend Company, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a real estate investment trust (“REIT”), and its monthly dividends are supported by the cash flow from over 15,450 real estate properties (including properties acquired in the Spirit merger in January 2024) primarily owned under long-term net lease agreements with commercial clients. To date, the company has declared 644 consecutive monthly dividends on its shares of common stock throughout its 55-year operating history and increased the dividend 123 times since Realty Income’s public listing in 1994 (NYSE: O).
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