Critical Comparison: SmartCentres Real Estate Investment Trust (OTCMKTS:CWYUF) vs. Phillips Edison & Company, Inc. (NASDAQ:PECO)

SmartCentres Real Estate Investment Trust (OTCMKTS:CWYUF) and Phillips Edison & Company, Inc. (NASDAQ:PECO) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Dividends

SmartCentres Real Estate Investment Trust pays an annual dividend of $1.36 per share and has a dividend yield of 7.2%. Phillips Edison & Company, Inc. pays an annual dividend of $1.23 per share and has a dividend yield of 3.5%. SmartCentres Real Estate Investment Trust pays out 111.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips Edison & Company, Inc. pays out 215.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips Edison & Company, Inc. has increased its dividend for 1 consecutive years. SmartCentres Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

SmartCentres Real Estate Investment Trust has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Phillips Edison & Company, Inc. has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Profitability

This table compares SmartCentres Real Estate Investment Trust and Phillips Edison & Company, Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SmartCentres Real Estate Investment Trust	35.62%	4.74%	2.50%
Phillips Edison & Company, Inc.	10.51%	2.73%	1.42%

Valuation & Earnings

This table compares SmartCentres Real Estate Investment Trust and Phillips Edison & Company, Inc.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SmartCentres Real Estate Investment Trust	$670.29 million	5.02	$172.78 million	$1.22	15.47
Phillips Edison & Company, Inc.	$661.39 million	6.62	$62.69 million	$0.57	61.28

SmartCentres Real Estate Investment Trust has higher revenue and earnings than Phillips Edison & Company, Inc.. SmartCentres Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Phillips Edison & Company, Inc., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for SmartCentres Real Estate Investment Trust and Phillips Edison & Company, Inc., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SmartCentres Real Estate Investment Trust	0	0	0	2	4.00
Phillips Edison & Company, Inc.	0	4	2	0	2.33

Phillips Edison & Company, Inc. has a consensus price target of $38.50, indicating a potential upside of 10.22%. Given Phillips Edison & Company, Inc.’s higher probable upside, analysts plainly believe Phillips Edison & Company, Inc. is more favorable than SmartCentres Real Estate Investment Trust.

Insider and Institutional Ownership

80.7% of Phillips Edison & Company, Inc. shares are owned by institutional investors. 20.9% of SmartCentres Real Estate Investment Trust shares are owned by company insiders. Comparatively, 7.9% of Phillips Edison & Company, Inc. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

SmartCentres Real Estate Investment Trust beats Phillips Edison & Company, Inc. on 12 of the 18 factors compared between the two stocks.

About SmartCentres Real Estate Investment Trust

SmartCentres is one of Canada’s largest fully integrated REITs, with a best-in-class and growing mixed-use portfolio featuring 191 strategically located properties in communities across the country. SmartCentres has approximately $12.0 billion in assets and owns 35.0 million square feet of income producing value-oriented retail and first-class office properties with 98.5% in place and committed occupancy, on 3,500 acres of owned land across Canada.

About Phillips Edison & Company, Inc.

Phillips Edison & Co., Inc. is a real estate investment trust, which engages in the ownership and operation of shopping centers. It also offers an investment management business providing property management and advisory services. Its portfolio consists of well-occupied, grocery-anchored neighborhood and community shopping centers having a mix of national, regional, and local retailers offering necessity-based goods and services. The company was founded by Jeffrey S. Edison and Michael C. Phillips in 1991 and is headquartered in Cincinnati, OH.