Realty Income (NYSE:O – Get Free Report) and Macerich (NYSE:MAC – Get Free Report) are both real estate companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.
Dividends
Realty Income pays an annual dividend of $3.25 per share and has a dividend yield of 5.5%. Macerich pays an annual dividend of $0.68 per share and has a dividend yield of 2.7%. Realty Income pays out 224.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Macerich pays out -183.8% of its earnings in the form of a dividend. 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.
Earnings & Valuation
This table compares Realty Income and Macerich”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Realty Income | $6.07 billion | 9.28 | $1.06 billion | $1.45 | 40.83 |
| Macerich | $1.01 billion | 7.07 | -$197.15 million | ($0.37) | -68.34 |
Realty Income has higher revenue and earnings than Macerich. Macerich 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 Realty Income and Macerich’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Realty Income | 21.85% | 3.27% | 1.80% |
| Macerich | -9.76% | -3.68% | -1.17% |
Institutional & Insider Ownership
70.8% of Realty Income shares are owned by institutional investors. Comparatively, 87.4% of Macerich shares are owned by institutional investors. 0.1% of Realty Income shares are owned by company insiders. Comparatively, 0.2% of Macerich shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk & Volatility
Realty Income has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Macerich has a beta of 2.11, indicating that its stock price is 111% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Realty Income and Macerich, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Realty Income | 1 | 10 | 5 | 2 | 2.44 |
| Macerich | 1 | 3 | 10 | 2 | 2.81 |
Realty Income presently has a consensus price target of $71.69, indicating a potential upside of 21.08%. Macerich has a consensus price target of $26.19, indicating a potential upside of 3.57%. Given Realty Income’s higher probable upside, research analysts plainly believe Realty Income is more favorable than Macerich.
Summary
Realty Income beats Macerich on 11 of the 17 factors compared between the two stocks.
About Realty Income
Realty Income Corporation is a real estate investment trust (REIT) that owns and manages commercial properties leased to businesses. Its portfolio includes retail, industrial, gaming, and other properties, typically leased under long-term net lease agreements in which tenants are responsible for many property operating expenses. Founded in 1969, Realty Income is known as “The Monthly Dividend Company” for its monthly dividend payments. The company serves tenants across the United States and has expanded its property portfolio into Europe.
About Macerich
The Macerich Company is a real estate investment trust (REIT) that owns, operates, leases and redevelops shopping centers in major U.S. markets. Its properties are primarily regional malls and other retail destinations, with a significant presence in the western United States. Macerich’s business includes managing its properties and attracting a mix of retailers, restaurants, entertainment venues and service providers. The company also invests in property upgrades and redevelopment to adapt its centers to changing customer and tenant needs.
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