Critical Analysis: FirstService (FSV) and Hudson Pacific Properties (HPP)
FirstService (NASDAQ:FSV) and Hudson Pacific Properties (NYSE:HPP) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Valuation and Earnings
This table compares FirstService and Hudson Pacific Properties’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|FirstService||$1.93 billion||1.54||$65.86 million||$1.80||47.69|
|Hudson Pacific Properties||$728.42 million||7.29||$99.37 million||$1.86||18.49|
This table compares FirstService and Hudson Pacific Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hudson Pacific Properties||13.47%||2.51%||1.46%|
Volatility and Risk
FirstService has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Hudson Pacific Properties has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.
Institutional & Insider Ownership
70.7% of FirstService shares are held by institutional investors. 1.9% of Hudson Pacific Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
FirstService pays an annual dividend of $0.54 per share and has a dividend yield of 0.6%. Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. FirstService pays out 30.0% of its earnings in the form of a dividend. Hudson Pacific Properties pays out 53.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. FirstService has increased its dividend for 3 consecutive years.
This is a breakdown of current recommendations and price targets for FirstService and Hudson Pacific Properties, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hudson Pacific Properties||0||1||7||0||2.88|
FirstService currently has a consensus price target of $86.33, suggesting a potential upside of 0.42%. Hudson Pacific Properties has a consensus price target of $38.50, suggesting a potential upside of 11.76%. Given Hudson Pacific Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Hudson Pacific Properties is more favorable than FirstService.
Hudson Pacific Properties beats FirstService on 9 of the 17 factors compared between the two stocks.
FirstService Corporation provides property services to residential and commercial customers in the United States and Canada. The company operates through two segments, FirstService Residential and FirstService Brands. The FirstService Residential segment manages private residential communities, such as condominiums, co-operatives, homeowner associations, master-planned communities, active adult and lifestyle communities, and various other residential developments. This segment also offers a range of ancillary services, including on-site staffing for building engineering and maintenance, full-service swimming pool and amenity management, security and concierge/front desk, and landscaping; and financial services comprising cash management, other banking transaction-related services, and specialized property insurance brokerage. In addition, this segment provides energy management solutions and advisory services, and resale processing services. The FirstService Brands segment offers property services through 6 franchise networks; and company-owned locations, including 17 California Closets locations and 8 Paul Davis Restoration locations. It offers residential and commercial restoration, painting, and floor coverings design and installation services; custom-designed and installed closet, and home storage solutions; home inspection services; exterior residential painting and window cleaning services; fire protection services; and heating, ventilation, and air conditioning services, as well as related services. This segment provides its services primarily under the Paul Davis Restoration, CertaPro Painters, California Closets, Pillar to Post Home Inspectors, Floor Coverings International, College Pro Painters, Century Fire Protection, and Service America brand names. FirstService Corporation was founded in 1988 and is headquartered in Toronto, Canada.
About Hudson Pacific Properties
Hudson Pacific Properties is a visionary real estate investment trust that owns and operates more than 17 million square feet of marquee office and studio properties. Focused on premier West Coast epicenters of innovation, media and technology, its anchor tenants include Fortune 500 and leading growth companies such as Netflix, Google, Square, Uber, NFL Enterprises and more. Hudson Pacific is publicly traded on the NYSE under the symbol HPP, and listed as a component of the Russell 2000 and the Russell 3000 indices.
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