Critical Review: Macerich (NYSE:MAC) & NETSTREIT (NYSE:NTST)

NETSTREIT (NYSE:NTST) and Macerich (NYSE:MAC) are both real estate companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares NETSTREIT and Macerich’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NETSTREIT	6.35%	0.95%	0.51%
Macerich	-16.85%	-6.26%	-1.97%

Institutional and Insider Ownership

87.4% of Macerich shares are owned by institutional investors. 0.7% of NETSTREIT shares are owned by company insiders. Comparatively, 0.2% of Macerich shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares NETSTREIT and Macerich”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NETSTREIT	$195.01 million	9.51	$6.90 million	$0.15	121.74
Macerich	$1.01 billion	6.33	-$197.15 million	($0.65)	-34.84

NETSTREIT has higher earnings, but lower revenue than Macerich. Macerich is trading at a lower price-to-earnings ratio than NETSTREIT, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

NETSTREIT has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Macerich has a beta of 2.06, indicating that its stock price is 106% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for NETSTREIT and Macerich, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NETSTREIT	0	2	13	0	2.87
Macerich	1	3	10	1	2.73

NETSTREIT currently has a consensus price target of $22.81, suggesting a potential upside of 24.90%. Macerich has a consensus price target of $26.33, suggesting a potential upside of 16.29%. Given NETSTREIT’s stronger consensus rating and higher possible upside, equities analysts clearly believe NETSTREIT is more favorable than Macerich.

Dividends

NETSTREIT pays an annual dividend of $0.90 per share and has a dividend yield of 4.9%. Macerich pays an annual dividend of $0.68 per share and has a dividend yield of 3.0%. NETSTREIT pays out 600.0% 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 -104.6% of its earnings in the form of a dividend. NETSTREIT has raised its dividend for 1 consecutive years. NETSTREIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

NETSTREIT beats Macerich on 13 of the 18 factors compared between the two stocks.

About NETSTREIT

NETSTREIT Corp. is an internally managed real estate investment trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT’s strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.

About Macerich

Macerich is a fully integrated, self-managed and self-administered real estate investment trust (REIT). As a leading owner, operator and developer of high-quality retail real estate in densely populated and attractive U.S. markets, Macerich’s portfolio is concentrated in California, the Pacific Northwest, Phoenix/Scottsdale, and the Metro New York to Washington, D.C. corridor. Developing and managing properties that serve as community cornerstones, Macerich currently owns 47 million square feet of real estate consisting primarily of interests in 44 regional town centers. Macerich is firmly dedicated to advancing environmental goals, social good and sound corporate governance. A recognized leader in sustainability, Macerich has achieved a #1 Global Real Estate Sustainability Benchmark (GRESB) ranking for the North American retail sector for nine consecutive years (2015-2023).