Contrasting Highlands REIT (OTCMKTS:HHDS) and Easterly Government Properties (NYSE:DEA)

Easterly Government Properties (NYSE:DEA) and Highlands REIT (OTCMKTS:HHDS) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Risk & Volatility

Easterly Government Properties has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Highlands REIT has a beta of 20.1, meaning that its share price is 1,910% more volatile than the S&P 500.

Profitability

This table compares Easterly Government Properties and Highlands REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Easterly Government Properties	4.24%	1.00%	0.42%
Highlands REIT	-25.09%	-4.66%	-2.80%

Institutional and Insider Ownership

86.5% of Easterly Government Properties shares are held by institutional investors. Comparatively, 0.0% of Highlands REIT shares are held by institutional investors. 7.8% of Easterly Government Properties shares are held by company insiders. Comparatively, 3.7% of Highlands REIT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Easterly Government Properties and Highlands REIT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Easterly Government Properties	$302.05 million	3.57	$19.55 million	$0.30	78.00
Highlands REIT	$36.08 million	0.83	-$1.00 million	N/A	N/A

Easterly Government Properties has higher revenue and earnings than Highlands REIT.

Analyst Ratings

This is a summary of current ratings and recommmendations for Easterly Government Properties and Highlands REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Easterly Government Properties	2	2	2	0	2.00
Highlands REIT	0	0	0	0	0.00

Easterly Government Properties currently has a consensus price target of $24.99, indicating a potential upside of 6.80%. Given Easterly Government Properties’ stronger consensus rating and higher possible upside, equities analysts clearly believe Easterly Government Properties is more favorable than Highlands REIT.

Summary

Easterly Government Properties beats Highlands REIT on 12 of the 13 factors compared between the two stocks.

About Easterly Government Properties

Easterly Government Properties, Inc. (NYSE: DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).

About Highlands REIT

We are a self-advised and self-administered real estate investment trust (REIT) created to own and manage substantially all of the non-core investment properties previously owned and managed by our former parent, InvenTrust Properties Corp., a Maryland corporation (InvenTrust). On April 28, 2016, we were spun-off from InvenTrust through a pro rata distribution (the Distribution) by InvenTrust of 100% of the outstanding shares of our common stock to holders of InvenTrust's common stock. Prior to or concurrent with the separation, we and InvenTrust engaged in certain reorganization transactions that were designed to consolidate substantially all of InvenTrust's remaining non-core investment properties in Highlands.