Uniti Group (NASDAQ:UNIT) and Eastgroup Properties (NYSE:EGP) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitability.

Profitability

This table compares Uniti Group and Eastgroup Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Uniti Group 0.91% -0.67% 0.21%
Eastgroup Properties 29.46% 10.32% 4.26%

Dividends

Uniti Group pays an annual dividend of $0.20 per share and has a dividend yield of 1.7%. Eastgroup Properties pays an annual dividend of $2.88 per share and has a dividend yield of 2.6%. Uniti Group pays out 8.0% of its earnings in the form of a dividend. Eastgroup Properties pays out 61.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Eastgroup Properties has increased its dividend for 7 consecutive years. Eastgroup Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings for Uniti Group and Eastgroup Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Uniti Group 4 4 0 0 1.50
Eastgroup Properties 0 6 3 0 2.33

Uniti Group presently has a consensus price target of $15.00, suggesting a potential upside of 28.31%. Eastgroup Properties has a consensus price target of $98.91, suggesting a potential downside of 11.32%. Given Uniti Group’s higher probable upside, equities analysts clearly believe Uniti Group is more favorable than Eastgroup Properties.

Volatility & Risk

Uniti Group has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Eastgroup Properties has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Valuation and Earnings

This table compares Uniti Group and Eastgroup Properties’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Uniti Group $1.02 billion 2.10 $16.19 million $2.51 4.66
Eastgroup Properties $300.39 million 13.65 $88.50 million $4.67 23.88

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

Institutional & Insider Ownership

72.2% of Uniti Group shares are held by institutional investors. Comparatively, 95.7% of Eastgroup Properties shares are held by institutional investors. 0.4% of Uniti Group shares are held by insiders. Comparatively, 2.0% of Eastgroup Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Eastgroup Properties beats Uniti Group on 13 of the 17 factors compared between the two stocks.

Uniti Group Company Profile

Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of wireless infrastructure solutions for the communications industry. As of December 31, 2018, Uniti owns 5.5 million fiber strand miles, approximately 928 wireless towers, and other communications real estate throughout the United States and Latin America.

Eastgroup Properties Company Profile

EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 50,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 41.7 million square feet.

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