Head to Head Analysis: Saul Centers (NYSE:BFS) & Phillips Edison & Company, Inc. (NASDAQ:PECO)

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

Dividends

Saul Centers pays an annual dividend of $2.36 per share and has a dividend yield of 7.6%. Phillips Edison & Company, Inc. pays an annual dividend of $1.30 per share and has a dividend yield of 3.7%. Saul Centers pays out 178.8% 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. pays out 236.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips Edison & Company, Inc. has raised its dividend for 1 consecutive years. Saul Centers is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Saul Centers and Phillips Edison & Company, Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saul Centers	15.51%	13.79%	2.03%
Phillips Edison & Company, Inc.	9.91%	2.64%	1.35%

Institutional and Insider Ownership

50.0% of Saul Centers shares are owned by institutional investors. Comparatively, 80.7% of Phillips Edison & Company, Inc. shares are owned by institutional investors. 56.6% of Saul Centers shares are owned by insiders. Comparatively, 8.0% of Phillips Edison & Company, Inc. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Saul Centers and Phillips Edison & Company, Inc.”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saul Centers	$268.85 million	2.80	$50.65 million	$1.32	23.38
Phillips Edison & Company, Inc.	$661.39 million	6.60	$62.69 million	$0.55	63.16

Phillips Edison & Company, Inc. has higher revenue and earnings than Saul Centers. Saul Centers 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 summary of recent ratings and recommmendations for Saul Centers and Phillips Edison & Company, Inc., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saul Centers	0	1	0	0	2.00
Phillips Edison & Company, Inc.	0	5	3	0	2.38

Phillips Edison & Company, Inc. has a consensus target price of $38.86, indicating a potential upside of 11.85%. Given Phillips Edison & Company, Inc.’s stronger consensus rating and higher possible upside, analysts clearly believe Phillips Edison & Company, Inc. is more favorable than Saul Centers.

Volatility & Risk

Saul Centers has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Phillips Edison & Company, Inc. has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Summary

Phillips Edison & Company, Inc. beats Saul Centers on 9 of the 17 factors compared between the two stocks.

About Saul Centers

Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio comprised of 61 properties that includes (a) 57 community and neighborhood Shopping Centers and Mixed-Use properties with approximately 9.8 million square feet of leasable area and (b) four land and development properties. Over 85% of the Company’s property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.

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.