Comparing Simon Property Group (NYSE:SPG) & Service Properties Trust (NASDAQ:SVC)

Simon Property Group (NYSE:SPG) and Service Properties Trust (NASDAQ:SVC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Profitability

This table compares Simon Property Group and Service Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simon Property Group	43.36%	76.21%	7.61%
Service Properties Trust	-12.87%	-22.67%	-3.37%

Risk and Volatility

Simon Property Group has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, Service Properties Trust has a beta of 2.19, indicating that its stock price is 119% more volatile than the S&P 500.

Earnings & Valuation

This table compares Simon Property Group and Service Properties Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simon Property Group	$5.66 billion	10.42	$2.28 billion	$7.51	24.06
Service Properties Trust	$1.87 billion	0.25	-$32.78 million	($1.47)	-1.93

Simon Property Group has higher revenue and earnings than Service Properties Trust. Service Properties Trust is trading at a lower price-to-earnings ratio than Simon Property Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Simon Property Group pays an annual dividend of $8.20 per share and has a dividend yield of 4.5%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.4%. Simon Property Group pays out 109.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Service Properties Trust pays out -2.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Simon Property Group and Service Properties Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simon Property Group	0	6	3	0	2.33
Service Properties Trust	1	0	1	0	2.00

Simon Property Group currently has a consensus price target of $162.78, indicating a potential downside of 9.90%. Service Properties Trust has a consensus price target of $5.50, indicating a potential upside of 94.35%. Given Service Properties Trust’s higher possible upside, analysts clearly believe Service Properties Trust is more favorable than Simon Property Group.

Insider and Institutional Ownership

93.0% of Simon Property Group shares are owned by institutional investors. Comparatively, 77.6% of Service Properties Trust shares are owned by institutional investors. 8.6% of Simon Property Group shares are owned by company insiders. Comparatively, 1.4% of Service Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Simon Property Group beats Service Properties Trust on 13 of the 16 factors compared between the two stocks.

About Simon Property Group

Simon Property Group, Inc. (NYSE:SPG) is a self-administered and self-managed real estate investment trust (REIT). Simon Property Group, L.P., or the Operating Partnership, is our majority-owned partnership subsidiary that owns all of our real estate properties and other assets. In this package, the terms Simon, we, our, or the Company refer to Simon Property Group, Inc., the Operating Partnership, and its subsidiaries. We own, develop and manage premier shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets, The Mills, and International Properties. At June 30, 2024, we owned or had an interest in 230 properties comprising 183 million square feet in North America, Asia and Europe. We also owned an 84% interest in The Taubman Realty Group, or TRG, which owns 22 regional, super-regional, and outlet malls in the U.S. and Asia. Additionally, at June 30, 2024, we had a 22.4% ownership interest in Klépierre, a publicly traded, Paris-based real estate company, which owns shopping centers in 14 European countries.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.