Five Point (NYSE: FPH) and Seritage Growth Properties (NYSE:SRG) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Profitability

This table compares Five Point and Seritage Growth Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Point 122.14% -1.59% -1.09%
Seritage Growth Properties -19.00% -3.29% -1.59%

Insider & Institutional Ownership

35.0% of Five Point shares are held by institutional investors. Comparatively, 97.1% of Seritage Growth Properties shares are held by institutional investors. 7.1% of Seritage Growth Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Seritage Growth Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Five Point does not pay a dividend. Seritage Growth Properties pays out 68.0% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Five Point and Seritage Growth Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Five Point $139.43 million 11.66 $73.23 million ($0.61) -18.30
Seritage Growth Properties $241.02 million 6.38 -$73.75 million $1.47 28.34

Five Point has higher earnings, but lower revenue than Seritage Growth Properties. Five Point is trading at a lower price-to-earnings ratio than Seritage Growth Properties, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for Five Point and Seritage Growth Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Point 0 2 4 0 2.67
Seritage Growth Properties 1 1 0 0 1.50

Five Point presently has a consensus price target of $19.90, indicating a potential upside of 78.32%. Seritage Growth Properties has a consensus price target of $39.00, indicating a potential downside of 6.39%. Given Five Point’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Five Point is more favorable than Seritage Growth Properties.

Summary

Five Point beats Seritage Growth Properties on 9 of the 15 factors compared between the two stocks.

About Five Point

Five Point Holdings, LLC, through its subsidiary, Five Point Operating Company, LP, plans, develops, and owns mixed-use communities in California, the United States. It sells residential and commercial land sites to homebuilders, commercial developers, and commercial buyers. The company was formerly known as Newhall Holding Company, LLC and changed its name to Five Point Holdings, LLC in May 2016. Five Point Holdings, LLC was founded in 2009 and is based in Aliso Viejo, California.

About Seritage Growth Properties

Seritage Growth Properties is a publicly-traded, self-administered and self-managed REIT with 230 wholly-owned properties and 23 joint venture properties totaling over 39 million square feet of space across 49 states and Puerto Rico. The Company was formed to unlock the underlying real estate value of a high-quality retail portfolio it acquired from Sears Holdings in July 2015. Pursuant to a master lease, the Company has the right to recapture certain space from Sears Holdings for retenanting or redevelopment purposes. The Company's mission is to create and own revitalized shopping, dining, entertainment and mixed-use destinations that provide enriched experience for consumers and local communities, and create long-term value for our shareholders.

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