Financial Contrast: Highwoods Properties (HIW) vs. Hudson Pacific Properties (HPP)
Highwoods Properties (NYSE: HIW) and Hudson Pacific Properties (NYSE:HPP) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.
Valuation & Earnings
This table compares Highwoods Properties and Hudson Pacific Properties’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Highwoods Properties||$665.63 million||7.87||$524.29 million||$1.47||34.51|
|Hudson Pacific Properties||$639.64 million||8.68||$33.06 million||$0.41||86.80|
Highwoods Properties has higher revenue and earnings than Hudson Pacific Properties. Highwoods Properties is trading at a lower price-to-earnings ratio than Hudson Pacific Properties, indicating that it is currently the more affordable of the two stocks.
This table compares Highwoods Properties and Hudson Pacific Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hudson Pacific Properties||8.98%||1.58%||0.91%|
This is a breakdown of current recommendations and price targets for Highwoods Properties and Hudson Pacific Properties, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hudson Pacific Properties||0||3||4||0||2.57|
Highwoods Properties presently has a consensus target price of $54.80, indicating a potential upside of 8.02%. Hudson Pacific Properties has a consensus target price of $37.79, indicating a potential upside of 6.17%. Given Highwoods Properties’ higher possible upside, equities research analysts plainly believe Highwoods Properties is more favorable than Hudson Pacific Properties.
Insider and Institutional Ownership
96.5% of Highwoods Properties shares are held by institutional investors. Comparatively, 99.6% of Hudson Pacific Properties shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by insiders. Comparatively, 0.3% of Hudson Pacific Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility & Risk
Highwoods Properties has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Hudson Pacific Properties has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.
Highwoods Properties pays an annual dividend of $1.76 per share and has a dividend yield of 3.5%. Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Highwoods Properties pays out 119.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hudson Pacific Properties pays out 243.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Highwoods Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Highwoods Properties beats Hudson Pacific Properties on 11 of the 16 factors compared between the two stocks.
Highwoods Properties Company Profile
Highwoods Properties, Inc. is an office real estate investment trust (REIT). The Company’s primary business is the operation, acquisition and development of office properties. The Company’s segments include Office and Other. The Company owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa. The Company conducts its activities through Highwoods Realty Limited Partnership (the Operating Partnership). The Company offers a range of real estate services to its customers. The Company offers services, including asset management, construction management, design and space planning, and renovation and re-positioning. The Company provides its customers with services, such as build-to-suit construction and space modification, including tenant improvements and expansions.
Hudson Pacific Properties Company Profile
Hudson Pacific Properties, Inc. is a real estate investment trust (REIT). The Company operates in two segments: office properties, and media and entertainment properties. The Company is focused on acquiring, repositioning, developing and operating office and media and entertainment properties in submarkets throughout Northern and Southern California and the Pacific Northwest. As of December 31, 2016, the Company’s portfolio included office properties consisting of an aggregate of approximately 14.1 million square feet, and media and entertainment properties consisting of approximately 0.9 million square feet of sound-stage, office and supporting production facilities. As of December 31, 2016, the Company also owned undeveloped density rights for approximately 2.5 million square feet of future office and residential space. The Company’s in-service office properties include stabilized office properties and lease-up office properties.
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