Insiders Bought Retail Properties of America, Should You?

We think that it’s best to compare Retail Properties of America to other real estate investment trusts, as these are the most likely alternatives for investors considering the stock. Four retail-focused REITs are DDR Corp (NYSE:DDR), Kimco Realty Corp (NYSE:KIM), Weingarten Realty Investors (NYSE:WRI), and Simon Property Group, Inc (NYSE:SPG). There is actually a fairly wide spread of beta statistics in these four stocks, with Simon having the lowest exposure to the broader market at a beta of 0.9 and DDR’s having the highest at 1.7, with the other two stocks falling about in the middle of that range. All four are also larger than Retail Properties of America in terms of market cap; Simon by quite a bit (at $48 billion), with the rest valued at less than $10 billion. In terms of dividend yields, there’s a fairly clear division: Simon and DDR have yields of about 3% at current dividend levels and prices, while Kimco and Weingarten offer yields above 4%. As a result, Retail Properties of America seems to have the highest yield- at least for now- though it also has the shortest history as a public company and the lowest market cap.

Between its income characteristics- and there’s a good case that it’s superior to its peers in that regard- and seeing consensus insider buying, Retail Properties of America Inc looks like an interesting choice among REITs. Income investors should of course look more closely to see that dividend payments will continue at similar levels, and be prepared for substantial fluctuations in the price with market movements.