Financial Analysis: Simon Property Group (NYSE:SPG) vs. Farmland Partners (NYSE:FPI)

Simon Property Group (NYSE:SPG) and Farmland Partners (NYSE:FPI) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Dividends

Simon Property Group pays an annual dividend of $8.40 per share and has a dividend yield of 4.9%. Farmland Partners pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. Simon Property Group pays out 111.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Farmland Partners pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

93.0% of Simon Property Group shares are owned by institutional investors. Comparatively, 58.0% of Farmland Partners shares are owned by institutional investors. 8.5% of Simon Property Group shares are owned by company insiders. Comparatively, 8.3% of Farmland Partners shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Simon Property Group and Farmland Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simon Property Group	0	7	2	0	2.22
Farmland Partners	0	0	2	0	3.00

Simon Property Group currently has a consensus price target of $169.22, suggesting a potential downside of 1.39%. Farmland Partners has a consensus price target of $15.00, suggesting a potential upside of 21.75%. Given Farmland Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Farmland Partners is more favorable than Simon Property Group.

Volatility and Risk

Simon Property Group has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500. Comparatively, Farmland Partners has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Profitability

This table compares Simon Property Group and Farmland Partners’ 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%
Farmland Partners	31.68%	3.53%	1.80%

Earnings and Valuation

This table compares Simon Property Group and Farmland Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simon Property Group	$5.91 billion	9.48	$2.28 billion	$7.51	22.85
Farmland Partners	$58.34 million	10.17	$30.91 million	$0.28	44.00

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

Summary

Simon Property Group beats Farmland Partners on 10 of the 15 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 Farmland Partners

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of December 31, 2023, the Company owns and/or manages approximately 171,100 acres in 16 states, including Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company has approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.