General Growth Properties Inc (GGP) is for the Long Term

Peers Comparison

At the current trading price of $20.20 per share, the total market cap is nearly $19 billion. The market is valuing General Growth at around 15.95x EV/EBITDA. Simon Property is a much bigger company with more than $50.1 billion in market cap. It is also valued at a much higher valuation, at 21.1x EV/EBITDA. One of their peers, Macerich Co (NYSE:MAC), with a $8.2 billion market cap, is valued at 15.35x EV/EBITDA. Macerich owns and has interests in around 65 regional shopping centers and 14 community shopping centers, with around 66 million leasable square feet. It has the lowest occupancy rate (93%) and the lowest tenant sales per square foot ($511) among the three. However, Macerich is paying the highest dividend yield at 3.7%, while General Growth’s dividend yield is the lowest at 2.1%. Simon Property is paying 2.5% dividend yield.

My Foolish Take

General Growth has long-term lease contracts with inflation protected percentage rent. It also has a cheaper valuation than the world’s biggest mall operator, Simon Property. At the current price, I personally think General Growth is a decent buy for long-term investors.

The article This Mall Operator is for the Long Term originally appeared on Fool.com and is written by Anh HOANG.

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