Taubman Centers (NYSE: TCO) and Macerich (NYSE:MAC) are both mid-cap financials companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.
Institutional & Insider Ownership
97.3% of Macerich shares are owned by institutional investors. 31.2% of Taubman Centers shares are owned by company insiders. Comparatively, 3.8% of Macerich shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a summary of recent ratings and recommmendations for Taubman Centers and Macerich, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Taubman Centers currently has a consensus target price of $63.22, suggesting a potential upside of 8.15%. Macerich has a consensus target price of $67.22, suggesting a potential upside of 14.05%. Given Macerich’s stronger consensus rating and higher possible upside, analysts clearly believe Macerich is more favorable than Taubman Centers.
This table compares Taubman Centers and Macerich’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Taubman Centers pays an annual dividend of $2.50 per share and has a dividend yield of 4.3%. Macerich pays an annual dividend of $2.96 per share and has a dividend yield of 5.0%. Taubman Centers pays out 274.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Macerich pays out 290.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Taubman Centers has raised its dividend for 7 consecutive years and Macerich has raised its dividend for 8 consecutive years. Macerich is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Taubman Centers and Macerich’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Taubman Centers||$629.16 million||5.64||$80.70 million||$0.91||64.24|
|Macerich||$993.66 million||8.35||$146.13 million||$1.02||57.78|
Macerich has higher revenue and earnings than Taubman Centers. Macerich is trading at a lower price-to-earnings ratio than Taubman Centers, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Taubman Centers has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Macerich has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.
Macerich beats Taubman Centers on 13 of the 17 factors compared between the two stocks.
About Taubman Centers
Taubman Centers, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company’s segment is focused on owning, developing and managing regional shopping centers. The Taubman Realty Group Limited Partnership (the Operating Partnership or TRG) is majority-owned partnership subsidiary of the Company that owns direct or indirect interests in all of its real estate properties. The Company owns, leases, acquires, disposes of, develops, expands and manages regional and super-regional shopping centers and interests therein. Its owned portfolio of operating centers as of December 31, 2016 consisted of 23 urban and suburban shopping centers operating in 11 the United States states, Puerto Rico, South Korea, and China. The consolidated businesses consist of shopping centers and entities that are controlled by ownership or contractual agreements, The Taubman Company LLC (Manager), and Taubman Properties Asia LLC and its subsidiaries (Taubman Asia).
The Macerich Company is a self-administered and self-managed real estate investment trust (REIT). The Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company owns ownership interests in, The Macerich Partnership, L.P. (the Operating Partnership). As of December 31, 2016, the Company, through its operating partnership, had ownership interests in 50 regional shopping centers and seven community/power shopping centers. These 57 regional and community/power shopping centers consisted of approximately 56 million square feet of gross leasable area (GLA), as of December 31, 2016. The Company’s properties include Danbury Fair Mall, Desert Sky Mall, Fresno Fashion Fair, NorthPark Mall, Oaks, The, Towne Mall, Valley Mall, Arrowhead Towne Center, Deptford Mall and South Plains Mall.
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