Contrasting Highwoods Properties (NYSE:HIW) and Douglas Emmett (NYSE:DEI)

Highwoods Properties (NYSE:HIW) and Douglas Emmett (NYSE:DEI) are both real estate companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Profitability

This table compares Highwoods Properties and Douglas Emmett’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highwoods Properties	22.56%	7.68%	2.98%
Douglas Emmett	-2.04%	-0.60%	-0.22%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Highwoods Properties and Douglas Emmett, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highwoods Properties	0	8	0	0	2.00
Douglas Emmett	1	6	1	0	2.00

Highwoods Properties currently has a consensus target price of $32.00, indicating a potential upside of 2.57%. Douglas Emmett has a consensus target price of $13.14, indicating a potential upside of 32.36%. Given Douglas Emmett’s higher probable upside, analysts clearly believe Douglas Emmett is more favorable than Highwoods Properties.

Dividends

Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.4%. Douglas Emmett pays an annual dividend of $0.76 per share and has a dividend yield of 7.7%. Highwoods Properties pays out 118.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett pays out -584.6% of its earnings in the form of a dividend. Douglas Emmett is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Highwoods Properties and Douglas Emmett”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highwoods Properties	$806.11 million	4.27	$159.61 million	$1.69	18.46
Douglas Emmett	$1.00 billion	1.66	$16.27 million	($0.13)	-76.38

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

Risk and Volatility

Highwoods Properties has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Institutional & Insider Ownership

96.3% of Highwoods Properties shares are owned by institutional investors. Comparatively, 97.4% of Douglas Emmett shares are owned by institutional investors. 1.3% of Highwoods Properties shares are owned by insiders. Comparatively, 13.0% of Douglas Emmett shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Douglas Emmett beats Highwoods Properties on 8 of the 15 factors compared between the two stocks.

About Highwoods Properties

Highwoods Properties, Inc. is a real estate investment trust that owns, develops, leases and manages office properties. Its portfolio is concentrated in business districts across the U.S. Sun Belt, including markets such as Atlanta, Charlotte, Nashville, Raleigh and Tampa. The company provides office space and related property management services to businesses across a range of industries. Its work includes developing and maintaining properties as well as leasing space to commercial tenants. Highwoods is headquartered in Raleigh, North Carolina.

About Douglas Emmett

Douglas Emmett, Inc. is a real estate investment trust (REIT) that owns, operates and acquires office and multifamily properties. Its portfolio is concentrated in established neighborhoods in Los Angeles and Honolulu, with properties serving businesses and residents in those markets. The company focuses on office buildings and apartment communities in areas including West Los Angeles and Honolulu. Its business includes managing and leasing its properties, as well as pursuing acquisitions and other opportunities to grow and maintain its portfolio.