Highwoods Properties (NYSE:HIW) and Pennsylvania R.E.I.T. (NYSE:PEI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Highwoods Properties and Pennsylvania R.E.I.T., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Highwoods Properties 0 4 4 0 2.50
Pennsylvania R.E.I.T. 4 0 1 0 1.40

Highwoods Properties currently has a consensus target price of $50.33, suggesting a potential upside of 53.78%. Pennsylvania R.E.I.T. has a consensus target price of $4.75, suggesting a potential upside of 404.30%. Given Pennsylvania R.E.I.T.’s higher probable upside, analysts plainly believe Pennsylvania R.E.I.T. is more favorable than Highwoods Properties.

Dividends

Highwoods Properties pays an annual dividend of $1.92 per share and has a dividend yield of 5.9%. Pennsylvania R.E.I.T. pays an annual dividend of $0.84 per share and has a dividend yield of 89.2%. Highwoods Properties pays out 57.7% of its earnings in the form of a dividend. Pennsylvania R.E.I.T. pays out 80.0% 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 has increased its dividend for 3 consecutive years.

Risk and Volatility

Highwoods Properties has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Pennsylvania R.E.I.T. has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500.

Valuation and Earnings

This table compares Highwoods Properties and Pennsylvania R.E.I.T.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Highwoods Properties $735.98 million 4.62 $136.92 million $3.33 9.83
Pennsylvania R.E.I.T. $336.79 million 0.22 -$10.87 million $1.05 0.90

Highwoods Properties has higher revenue and earnings than Pennsylvania R.E.I.T.. Pennsylvania R.E.I.T. is trading at a lower price-to-earnings ratio than Highwoods Properties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Highwoods Properties and Pennsylvania R.E.I.T.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Highwoods Properties 18.52% 6.31% 2.80%
Pennsylvania R.E.I.T. -3.23% -2.35% -0.46%

Institutional and Insider Ownership

95.1% of Highwoods Properties shares are held by institutional investors. Comparatively, 65.9% of Pennsylvania R.E.I.T. shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by insiders. Comparatively, 3.1% of Pennsylvania R.E.I.T. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Highwoods Properties beats Pennsylvania R.E.I.T. on 13 of the 17 factors compared between the two stocks.

Highwoods Properties Company Profile

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW) real estate investment trust (“REIT”) and a member of the S&P MidCap 400 Index. The Company is a fully-integrated office REIT that 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.

Pennsylvania R.E.I.T. Company Profile

PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely-populated eastern U.S. with concentrations in the mid-Atlantic's top MSAs. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures.

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