Highlands REIT (OTCMKTS:HHDS) & Generation Income Properties (NASDAQ:GIPR) Critical Analysis

Highlands REIT (OTCMKTS:HHDS) and Generation Income Properties (NASDAQ:GIPR) are both small-cap real estate companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highlands REIT	$37.41 million	0.46	-$11.10 million	($0.01)	-2.41
Generation Income Properties	$9.74 million	0.05	-$10.34 million	($18.10)	-0.04

Generation Income Properties has lower revenue, but higher earnings than Highlands REIT. Highlands REIT is trading at a lower price-to-earnings ratio than Generation Income Properties, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.0% of Highlands REIT shares are owned by institutional investors. Comparatively, 20.7% of Generation Income Properties shares are owned by institutional investors. 2.3% of Highlands REIT shares are owned by company insiders. Comparatively, 6.2% of Generation Income Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Highlands REIT and Generation Income Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highlands REIT	0	0	0	0	0.00
Generation Income Properties	1	0	0	0	1.00

Profitability

This table compares Highlands REIT and Generation Income Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highlands REIT	-30.49%	-5.91%	-3.53%
Generation Income Properties	-102.07%	N/A	-8.90%

Volatility and Risk

Highlands REIT has a beta of 21.65, indicating that its stock price is 2,065% more volatile than the S&P 500. Comparatively, Generation Income Properties has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

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.

About Generation Income Properties

Generation Income Properties, Inc., located in Tampa, Florida, is an internally managed real estate investment trust formed to acquire and own, directly and jointly, real estate investments focused on retail, office, and industrial net lease properties in densely populated submarkets.