Critical Comparison: American Assets Trust (AAT) versus Acadia Realty Trust (AKR)

American Assets Trust (NYSE: AAT) and Acadia Realty Trust (NYSE:AKR) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Earnings & Valuation

This table compares American Assets Trust and Acadia Realty Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Assets Trust $298.95 million 6.40 $168.82 million $0.66 61.49
Acadia Realty Trust $251.17 million 10.04 $140.01 million $0.64 47.09

American Assets Trust has higher revenue and earnings than Acadia Realty Trust. Acadia Realty Trust is trading at a lower price-to-earnings ratio than American Assets Trust, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

97.8% of American Assets Trust shares are owned by institutional investors. 34.2% of American Assets Trust shares are owned by insiders. Comparatively, 1.7% of Acadia Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

American Assets Trust pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Acadia Realty Trust pays an annual dividend of $1.04 per share and has a dividend yield of 3.5%. American Assets Trust pays out 157.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Acadia Realty Trust pays out 162.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Acadia Realty Trust has raised its dividend for 4 consecutive years. Acadia Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

American Assets Trust has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Acadia Realty Trust has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for American Assets Trust and Acadia Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Assets Trust 0 1 1 0 2.50
Acadia Realty Trust 0 1 3 0 2.75

American Assets Trust presently has a consensus target price of $47.00, indicating a potential upside of 15.82%. Acadia Realty Trust has a consensus target price of $33.50, indicating a potential upside of 11.15%. Given American Assets Trust’s higher possible upside, equities research analysts plainly believe American Assets Trust is more favorable than Acadia Realty Trust.

Profitability

This table compares American Assets Trust and Acadia Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Assets Trust 10.93% 3.94% 1.61%
Acadia Realty Trust 23.63% 2.50% 1.37%

Summary

American Assets Trust beats Acadia Realty Trust on 10 of the 17 factors compared between the two stocks.

About American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust (REIT). The Company owns, operates, acquires and develops retail, office, multifamily and mixed-use properties in Southern California, Northern California, Oregon, Washington, Texas and Hawaii markets. The Company operates in four business segments: retail, office, multifamily and mixed-use. As of December 31, 2016, the Company’s portfolio consisted of 11 retail shopping centers; seven office properties; a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center, and five multifamily properties. Additionally, as of December 31, 2016, the Company owned land at four of its properties that it classified as held for development and construction in progress. The Company’s markets include San Diego, the San Francisco Bay Area, Portland, Oregon, Bellevue, Washington and Oahu, Hawaii.

About Acadia Realty Trust

Acadia Realty Trust is a real estate investment trust. The Company is focused on the ownership, acquisition, development and management of retail properties located in the United States. It operates through three segments: Core Portfolio, Funds and Structured Financing. Core Portfolio and Fund properties primarily consist of street and urban retail, and dense suburban shopping centers. Funds holds primarily retail real estate in which it co-invests with institutional investors. Structured Financing consists of earnings and expenses related to notes and mortgages receivable, which are held within the Core Portfolio or the Funds. As of December 31, 2016, it had ownership interests in 182 properties within its core portfolio. In the Core Portfolio segment, the Company owned an interest in a 311,000 square foot shopping center, a 28,000 square foot retail and an interest in an 87,000 square foot retail property, among others, as of December 31, 2016.

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