Reviewing Simon Property Group (NYSE:SPG) and New Residential Investment (NYSE:NRZ)

Simon Property Group (NYSE:SPGGet Rating) and New Residential Investment (NYSE:NRZGet Rating) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Dividends

Simon Property Group pays an annual dividend of $6.60 per share and has a dividend yield of 5.7%. New Residential Investment pays an annual dividend of $1.00 per share and has a dividend yield of 9.2%. Simon Property Group pays out 97.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New Residential Investment pays out 44.2% of its earnings in the form of a dividend. Simon Property Group has increased its dividend for 1 consecutive years and New Residential Investment has increased its dividend for 1 consecutive years. New Residential Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Simon Property Group and New Residential Investment’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Simon Property Group $5.12 billion 7.50 $2.25 billion $6.78 17.22
New Residential Investment $3.62 billion 1.40 $772.23 million $2.26 4.81

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

Analyst Ratings

This is a summary of current ratings for Simon Property Group and New Residential Investment, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simon Property Group 0 6 10 0 2.63
New Residential Investment 0 1 6 0 2.86

Simon Property Group currently has a consensus price target of $165.87, indicating a potential upside of 42.03%. New Residential Investment has a consensus price target of $12.60, indicating a potential upside of 16.02%. Given Simon Property Group’s higher probable upside, research analysts plainly believe Simon Property Group is more favorable than New Residential Investment.

Institutional & Insider Ownership

91.6% of Simon Property Group shares are held by institutional investors. Comparatively, 46.5% of New Residential Investment shares are held by institutional investors. 8.5% of Simon Property Group shares are held by insiders. Comparatively, 0.7% of New Residential Investment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Simon Property Group has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, New Residential Investment has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Profitability

This table compares Simon Property Group and New Residential Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Simon Property Group 43.12% 56.67% 6.25%
New Residential Investment 28.82% 13.84% 1.95%

Summary

Simon Property Group beats New Residential Investment on 12 of the 16 factors compared between the two stocks.

About Simon Property Group (Get Rating)

Simon is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (Simon Property Group, NYSE: SPG). Our properties across North America, Europe and Asia provide community gathering places for millions of people every day and generate billions in annual sales.

About New Residential Investment (Get Rating)

New Residential Investment Corp. operates as a real estate investment trust in the United States. It operates through Origination, Servicing, MSR Related Investments, Residential Securities, Properties and Loans, Consumer Loans, Mortgage Loans, and Corporate segments. The company invests in mortgage servicing rights, mortgage origination and servicing companies, residential mortgage-backed securities, properties and loans, consumer loans, and other opportunistic investments. It qualifies as a real estate investment trust for federal income tax purposes. The company generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. New Residential Investment Corp. was incorporated in 2011 and is based in New York, New York.

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