Alexander & Baldwin (NYSE:ALEX) and Saul Centers (NYSE:BFS) Critical Survey

Saul Centers (NYSE:BFS – Get Rating) and Alexander & Baldwin (NYSE:ALEX – Get Rating) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Dividends

Saul Centers pays an annual dividend of $2.36 per share and has a dividend yield of 7.0%. Alexander & Baldwin pays an annual dividend of $0.88 per share and has a dividend yield of 4.7%. Saul Centers pays out 143.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander & Baldwin pays out -112.8% of its earnings in the form of a dividend. Saul Centers has raised its dividend for 2 consecutive years and Alexander & Baldwin has raised its dividend for 2 consecutive years.

Institutional & Insider Ownership

45.4% of Saul Centers shares are held by institutional investors. Comparatively, 85.6% of Alexander & Baldwin shares are held by institutional investors. 50.5% of Saul Centers shares are held by company insiders. Comparatively, 1.1% of Alexander & Baldwin shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Saul Centers and Alexander & Baldwin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saul Centers	20.40%	14.73%	2.78%
Alexander & Baldwin	-18.24%	3.30%	1.98%

Analyst Ratings

This is a summary of current recommendations and price targets for Saul Centers and Alexander & Baldwin, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saul Centers	0	2	0	0	2.00
Alexander & Baldwin	0	1	0	0	2.00

Saul Centers presently has a consensus target price of $46.00, suggesting a potential upside of 36.62%. Alexander & Baldwin has a consensus target price of $20.00, suggesting a potential upside of 5.71%. Given Saul Centers’ higher possible upside, equities research analysts clearly believe Saul Centers is more favorable than Alexander & Baldwin.

Volatility & Risk

Saul Centers has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Alexander & Baldwin has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Valuation and Earnings

This table compares Saul Centers and Alexander & Baldwin’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saul Centers	$245.86 million	3.27	$50.19 million	$1.64	20.53
Alexander & Baldwin	$230.50 million	5.96	-$50.60 million	($0.78)	-24.26

Saul Centers has higher revenue and earnings than Alexander & Baldwin. Alexander & Baldwin is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.

Summary

Saul Centers beats Alexander & Baldwin on 10 of the 14 factors compared between the two stocks.

About Saul Centers

(Get Rating)

Saul Centers, Inc. is a real estate investment trust, which engages in the ownership, management, and development of income producing properties. It operates through the following segments: Shopping Centers and Mixed-Use Properties. The Shopping Centers segment consists of community and neighbourhood shopping centers which are anchored by supermarkets, discount department stores, and drug stores. The Mixed-Use Properties segment consists of facilities which are located in differing commercial environments with distinctive demographic characteristics and are geographically removed from one another. The company was founded on June 10, 1993 and is headquartered in Bethesda, MD.

About Alexander & Baldwin

(Get Rating)

Alexander & Baldwin, Inc. engages in real estate business. It operates through the following segments: Commercial Real Estate, Land Operations, and Materials and Construction. The Commercial Real Estate segment includes investments and acquisitions, construction and development, in-house leasing and property management, and asset management. The Land Operations segment consists of legacy assets and landholdings that are subject to the company’s simplification and monetization effort. The Materials and Construction segment deals with asphalt paving contractor and natural materials and infrastructure construction services. The company was founded by Samuel Thomas Alexander and Henry Perrine Baldwin on 1870 and is headquartered in Honolulu, HI.