Saul Centers (BFS) vs. Retail Opportunity Investments (NASDAQ:ROIC) Financial Survey

Retail Opportunity Investments (NASDAQ:ROIC) and Saul Centers (NYSE:BFS) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.

Dividends

Retail Opportunity Investments pays an annual dividend of $0.79 per share and has a dividend yield of 4.5%. Saul Centers pays an annual dividend of $2.12 per share and has a dividend yield of 3.9%. Retail Opportunity Investments pays out 69.3% of its earnings in the form of a dividend. Saul Centers pays out 68.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Retail Opportunity Investments has increased its dividend for 9 consecutive years and Saul Centers has increased its dividend for 5 consecutive years. Retail Opportunity Investments is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Retail Opportunity Investments and Saul Centers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Retail Opportunity Investments 15.22% 3.46% 1.50%
Saul Centers 22.23% 21.45% 3.41%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Retail Opportunity Investments and Saul Centers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Retail Opportunity Investments 1 3 0 0 1.75
Saul Centers 0 1 0 0 2.00

Retail Opportunity Investments currently has a consensus price target of $18.00, suggesting a potential upside of 2.62%. Saul Centers has a consensus price target of $58.00, suggesting a potential upside of 6.72%. Given Saul Centers’ stronger consensus rating and higher probable upside, analysts plainly believe Saul Centers is more favorable than Retail Opportunity Investments.

Institutional & Insider Ownership

94.3% of Retail Opportunity Investments shares are held by institutional investors. Comparatively, 46.1% of Saul Centers shares are held by institutional investors. 2.5% of Retail Opportunity Investments shares are held by company insiders. Comparatively, 48.5% of Saul Centers shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Retail Opportunity Investments and Saul Centers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Retail Opportunity Investments $295.80 million 6.78 $42.73 million $1.14 15.39
Saul Centers $227.90 million 5.44 $50.55 million $3.11 17.48

Saul Centers has lower revenue, but higher earnings than Retail Opportunity Investments. Retail Opportunity Investments is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Retail Opportunity Investments has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Summary

Saul Centers beats Retail Opportunity Investments on 11 of the 16 factors compared between the two stocks.

Retail Opportunity Investments Company Profile

Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely-populated, metropolitan markets across the West Coast. As of March 31, 2019, ROIC owned 90 shopping centers encompassing approximately 10.3 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services and Standard & Poor's.

Saul Centers Company Profile

Saul Centers, Inc. is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 60 properties which includes (a) 56 community and neighborhood shopping centers and seven mixed-use properties with approximately 9.3 million square feet of leasable area and (b) four land and development properties. Over 85% of the Saul Centers' property operating income is generated by properties in the metropolitan Washington, DC/Baltimore area.

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