Washington Real Estate Investment Trust (NYSE: WRE) and Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Dividends

Washington Real Estate Investment Trust pays an annual dividend of $1.20 per share and has a dividend yield of 3.7%. Hannon Armstrong Sustainable Infrastructure Capital pays an annual dividend of $1.32 per share and has a dividend yield of 5.5%. Washington Real Estate Investment Trust pays out 90.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hannon Armstrong Sustainable Infrastructure Capital pays out 244.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Washington Real Estate Investment Trust has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

84.9% of Washington Real Estate Investment Trust shares are owned by institutional investors. Comparatively, 71.1% of Hannon Armstrong Sustainable Infrastructure Capital shares are owned by institutional investors. 0.6% of Washington Real Estate Investment Trust shares are owned by company insiders. Comparatively, 7.2% of Hannon Armstrong Sustainable Infrastructure Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Washington Real Estate Investment Trust and Hannon Armstrong Sustainable Infrastructure Capital’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Washington Real Estate Investment Trust $317.68 million 7.89 $182.98 million $1.33 24.51
Hannon Armstrong Sustainable Infrastructure Capital $38.87 million 32.09 $27.89 million $0.54 44.72

Washington Real Estate Investment Trust has higher revenue and earnings than Hannon Armstrong Sustainable Infrastructure Capital. Washington Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Hannon Armstrong Sustainable Infrastructure Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Washington Real Estate Investment Trust and Hannon Armstrong Sustainable Infrastructure Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Real Estate Investment Trust 0 2 3 0 2.60
Hannon Armstrong Sustainable Infrastructure Capital 0 1 6 0 2.86

Washington Real Estate Investment Trust presently has a consensus price target of $34.10, indicating a potential upside of 4.60%. Hannon Armstrong Sustainable Infrastructure Capital has a consensus price target of $25.33, indicating a potential upside of 4.90%. Given Hannon Armstrong Sustainable Infrastructure Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Hannon Armstrong Sustainable Infrastructure Capital is more favorable than Washington Real Estate Investment Trust.

Volatility and Risk

Washington Real Estate Investment Trust has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Hannon Armstrong Sustainable Infrastructure Capital has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares Washington Real Estate Investment Trust and Hannon Armstrong Sustainable Infrastructure Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Real Estate Investment Trust 31.36% 9.34% 4.36%
Hannon Armstrong Sustainable Infrastructure Capital 29.99% 8.57% 2.66%

Summary

Washington Real Estate Investment Trust beats Hannon Armstrong Sustainable Infrastructure Capital on 10 of the 17 factors compared between the two stocks.

Washington Real Estate Investment Trust Company Profile

Washington Real Estate Investment Trust is a self-administered equity real estate investment trust. The Company’s business consists of the ownership and operation of real property in the greater Washington metro region. The Company owns a diversified portfolio of office buildings, multifamily buildings and retail centers. The Company’s segments include office, multifamily and retail. The Company’s office properties provide office space for various types of businesses and professions. The Company’s multifamily properties provide rental housing for individuals and families throughout the Washington metro region. Its retail properties are typically grocery store anchored neighborhood centers that include other small shop tenants or regional power centers with various junior box tenants. As of April 4, 2017, it owned a diversified portfolio of 50 properties, totaling approximately 6.0 million square feet of commercial space and 4,480 residential units, and land held for development.

Hannon Armstrong Sustainable Infrastructure Capital Company Profile

Hannon Armstrong Sustainable Infrastructure Capital, Inc. makes debt and equity investments in sustainable infrastructure, including energy efficiency and renewable energy. The Company focuses on providing preferred or senior level capital to sponsors and obligors for assets that generate long-term, recurring and predictable cash flows. The Company focuses its investment activities primarily on Energy Efficiency Projects, which include projects typically undertaken by energy service companies, which reduce a building’s or facility’s energy usage or cost by installing various building components, including heating, ventilation and air conditioning systems, lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems, and Renewable Energy Projects, which include projects that deploy cleaner energy sources, such as solar and wind to generate power production. It may also invest in other projects, such as water or communications infrastructure.

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