Critical Review: Farmland Partners (NYSE:FPI) & Hudson Pacific Properties (NYSE:HPP)

Farmland Partners (NYSE:FPI) and Hudson Pacific Properties (NYSE:HPP) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Earnings & Valuation

This table compares Farmland Partners and Hudson Pacific Properties”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmland Partners	$58.23 million	8.41	$59.91 million	$1.22	8.94
Hudson Pacific Properties	$842.08 million	1.18	-$352.29 million	($2.81)	-0.93

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Farmland Partners and Hudson Pacific Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmland Partners	0	0	0	0	0.00
Hudson Pacific Properties	2	6	4	0	2.17

Hudson Pacific Properties has a consensus target price of $3.2182, suggesting a potential upside of 22.83%. Given Hudson Pacific Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Hudson Pacific Properties is more favorable than Farmland Partners.

Insider and Institutional Ownership

58.0% of Farmland Partners shares are held by institutional investors. Comparatively, 97.6% of Hudson Pacific Properties shares are held by institutional investors. 8.3% of Farmland Partners shares are held by insiders. Comparatively, 4.9% of Hudson Pacific Properties shares are held 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.

Profitability

This table compares Farmland Partners and Hudson Pacific Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmland Partners	127.59%	14.18%	8.06%
Hudson Pacific Properties	-53.76%	-15.10%	-5.27%

Volatility & Risk

Farmland Partners has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Hudson Pacific Properties has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.

Summary

Farmland Partners beats Hudson Pacific Properties on 8 of the 14 factors compared between the two stocks.

About Farmland Partners

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of December 31, 2023, the Company owns and/or manages approximately 171,100 acres in 16 states, including Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company has approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.

About Hudson Pacific Properties

Hudson Pacific Properties (NYSE: HPP) is a real estate investment trust serving dynamic tech and media tenants in global epicenters for these synergistic, converging and secular growth industries. Hudson Pacific's unique and high-barrier tech and media focus leverages a full-service, end-to-end value creation platform forged through deep strategic relationships and niche expertise across identifying, acquiring, transforming and developing properties into world-class amenitized, collaborative and sustainable office and studio space.