Federal Realty Investment Trust (NYSE:FRT) versus Simon Property Group (NYSE:SPG) Critical Analysis

Federal Realty Investment Trust (NYSE:FRT) and Simon Property Group (NYSE:SPG) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Federal Realty Investment Trust and Simon Property Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Realty Investment Trust	0	7	6	1	2.57
Simon Property Group	0	9	4	0	2.31

Federal Realty Investment Trust currently has a consensus price target of $109.31, indicating a potential upside of 9.72%. Simon Property Group has a consensus price target of $186.46, indicating a potential upside of 3.14%. Given Federal Realty Investment Trust’s stronger consensus rating and higher probable upside, equities analysts clearly believe Federal Realty Investment Trust is more favorable than Simon Property Group.

Volatility & Risk

Federal Realty Investment Trust has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Simon Property Group has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.

Earnings and Valuation

This table compares Federal Realty Investment Trust and Simon Property Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Realty Investment Trust	$1.20 billion	7.15	$295.21 million	$3.95	25.22
Simon Property Group	$6.03 billion	9.78	$2.37 billion	$6.47	27.94

Simon Property Group has higher revenue and earnings than Federal Realty Investment Trust. Federal Realty Investment Trust 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.

Profitability

This table compares Federal Realty Investment Trust and Simon Property Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal Realty Investment Trust	28.01%	11.19%	4.04%
Simon Property Group	36.78%	72.38%	6.75%

Dividends

Federal Realty Investment Trust pays an annual dividend of $4.40 per share and has a dividend yield of 4.4%. Simon Property Group pays an annual dividend of $8.60 per share and has a dividend yield of 4.8%. Federal Realty Investment Trust pays out 111.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simon Property Group pays out 132.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has raised its dividend for 58 consecutive years and Simon Property Group has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

93.9% of Federal Realty Investment Trust shares are owned by institutional investors. Comparatively, 93.0% of Simon Property Group shares are owned by institutional investors. 1.0% of Federal Realty Investment Trust shares are owned by insiders. Comparatively, 8.7% of Simon Property Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Simon Property Group beats Federal Realty Investment Trust on 11 of the 18 factors compared between the two stocks.

About Federal Realty Investment Trust

Federal Realty Investment Trust is an equity real estate investment trust, which engages in the provision of ownership, management, and redevelopment of retail and mixed-use properties located primarily in communities where demand exceeds supply in strategically selected metropolitan markets. The company was founded in 1962 and is headquartered in North Bethesda, MD.

About Simon Property Group

Simon Property Group, Inc. (NYSE:SPG) is a self-administered and self-managed real estate investment trust (REIT). Simon Property Group, L.P., or the Operating Partnership, is our majority-owned partnership subsidiary that owns all of our real estate properties and other assets. In this package, the terms Simon, we, our, or the Company refer to Simon Property Group, Inc., the Operating Partnership, and its subsidiaries. We own, develop and manage premier shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets, The Mills, and International Properties. At June 30, 2024, we owned or had an interest in 230 properties comprising 183 million square feet in North America, Asia and Europe. We also owned an 84% interest in The Taubman Realty Group, or TRG, which owns 22 regional, super-regional, and outlet malls in the U.S. and Asia. Additionally, at June 30, 2024, we had a 22.4% ownership interest in Klépierre, a publicly traded, Paris-based real estate company, which owns shopping centers in 14 European countries.