Analyzing Tanger Factory Outlet Centers (NYSE:SKT) & Arbor Realty Trust (NYSE:ABR)

Tanger Factory Outlet Centers (NYSE:SKTGet Rating) and Arbor Realty Trust (NYSE:ABRGet Rating) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Profitability

This table compares Tanger Factory Outlet Centers and Arbor Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tanger Factory Outlet Centers 5.84% 5.04% 1.19%
Arbor Realty Trust 62.97% 17.19% 2.50%

Dividends

Tanger Factory Outlet Centers pays an annual dividend of $0.80 per share and has a dividend yield of 5.6%. Arbor Realty Trust pays an annual dividend of $1.52 per share and has a dividend yield of 11.6%. Tanger Factory Outlet Centers pays out 363.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arbor Realty Trust pays out 71.4% of its earnings in the form of a dividend. Tanger Factory Outlet Centers has raised its dividend for 1 consecutive years and Arbor Realty Trust has raised its dividend for 8 consecutive years. Arbor Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Tanger Factory Outlet Centers and Arbor Realty Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tanger Factory Outlet Centers $426.52 million 3.50 $9.12 million $0.22 64.91
Arbor Realty Trust $466.09 million 4.50 $339.30 million $2.13 6.15

Arbor Realty Trust has higher revenue and earnings than Tanger Factory Outlet Centers. Arbor Realty Trust is trading at a lower price-to-earnings ratio than Tanger Factory Outlet Centers, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

82.2% of Tanger Factory Outlet Centers shares are held by institutional investors. Comparatively, 37.9% of Arbor Realty Trust shares are held by institutional investors. 2.2% of Tanger Factory Outlet Centers shares are held by company insiders. Comparatively, 3.8% of Arbor Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Tanger Factory Outlet Centers and Arbor Realty Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tanger Factory Outlet Centers 1 0 1 0 2.00
Arbor Realty Trust 0 0 3 0 3.00

Tanger Factory Outlet Centers currently has a consensus target price of $18.00, indicating a potential upside of 26.05%. Arbor Realty Trust has a consensus target price of $22.00, indicating a potential upside of 68.07%. Given Arbor Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Arbor Realty Trust is more favorable than Tanger Factory Outlet Centers.

Risk and Volatility

Tanger Factory Outlet Centers has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500. Comparatively, Arbor Realty Trust has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500.

Summary

Arbor Realty Trust beats Tanger Factory Outlet Centers on 14 of the 17 factors compared between the two stocks.

Tanger Factory Outlet Centers Company Profile (Get Rating)

Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a leading operator of open-air upscale outlet shopping centers that owns, or has an ownership interest in, a portfolio of 38 centers. Tanger's operating properties are located in 20 states and in Canada, totaling approximately 14.1 million square feet, leased to over 2,700 stores operated by more than 500 different brand name companies. The Company has more than 39 years of experience in the outlet industry and is a publicly-traded REIT. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission ("SEC") that includes a supplemental information package for the quarter ended September 30, 2020.

Arbor Realty Trust Company Profile (Get Rating)

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates in two segments, Structured Business and Agency Business. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. The company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower's equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.

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