Howard Hughes (NYSE:HHH) vs. Transcontinental Realty Investors (NYSE:TCI) Critical Review

Transcontinental Realty Investors (NYSE:TCI) and Howard Hughes (NYSE:HHH) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

93.8% of Howard Hughes shares are held by institutional investors. 86.2% of Transcontinental Realty Investors shares are held by insiders. Comparatively, 48.0% of Howard Hughes shares are held by 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 recent ratings and price targets for Transcontinental Realty Investors and Howard Hughes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Transcontinental Realty Investors	0	1	0	0	2.00
Howard Hughes	0	3	2	0	2.40

Howard Hughes has a consensus price target of $83.33, suggesting a potential upside of 19.97%. Given Howard Hughes’ stronger consensus rating and higher probable upside, analysts clearly believe Howard Hughes is more favorable than Transcontinental Realty Investors.

Profitability

This table compares Transcontinental Realty Investors and Howard Hughes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Transcontinental Realty Investors	11.52%	0.30%	0.23%
Howard Hughes	8.40%	5.54%	1.68%

Volatility & Risk

Transcontinental Realty Investors has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Howard Hughes has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Valuation and Earnings

This table compares Transcontinental Realty Investors and Howard Hughes”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Transcontinental Realty Investors	$47.07 million	6.75	$5.86 million	$0.64	57.44
Howard Hughes	$1.47 billion	2.81	$131.88 million	$2.11	32.92

Howard Hughes has higher revenue and earnings than Transcontinental Realty Investors. Howard Hughes is trading at a lower price-to-earnings ratio than Transcontinental Realty Investors, indicating that it is currently the more affordable of the two stocks.

Summary

Howard Hughes beats Transcontinental Realty Investors on 10 of the 14 factors compared between the two stocks.

About Transcontinental Realty Investors

Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The Company also holds mortgage receivables.

About Howard Hughes

Howard Hughes Holdings Inc., together with its subsidiaries, operates as a real estate development company in the United States. It operates in four segments: Operating Assets; Master Planned Communities (MPCs); Seaport; and Strategic Developments. The Operating Assets segment consists of developed or acquired retail, office, and multi-family properties along with other retail investments. Its MPCs segment develops, sells, and leases residential and commercial land designated for long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona. The Seaport segment is involved in the landlord operations, managed businesses, and events and sponsorships services of its restaurant, retail, and entertain properties in Pier 17, New York City; Historic Area/Uplands; and Tin Building, as well as in 250 Water Street and in the Jean-Georges restaurants. The Strategic Development segment develops and redevelops residential condominiums and commercial properties. It serves homebuilders. Howard Hughes Holdings Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.