Financial Review: Paramount Group (PGRE) & Hudson Pacific Properties (HPP)
Paramount Group (NASDAQ: PGRE) and Hudson Pacific Properties (NYSE:HPP) are both mid-cap financials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.
This table compares Paramount Group and Hudson Pacific Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hudson Pacific Properties||7.87%||1.37%||0.79%|
This is a breakdown of recent ratings and target prices for Paramount Group and Hudson Pacific Properties, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hudson Pacific Properties||0||2||6||0||2.75|
Paramount Group presently has a consensus price target of $16.10, suggesting a potential upside of 0.00%. Hudson Pacific Properties has a consensus price target of $38.06, suggesting a potential upside of 14.54%. Given Hudson Pacific Properties’ stronger consensus rating and higher probable upside, analysts clearly believe Hudson Pacific Properties is more favorable than Paramount Group.
Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. Paramount Group does not pay a dividend. Hudson Pacific Properties pays out 277.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation & Earnings
This table compares Paramount Group and Hudson Pacific Properties’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Paramount Group||$708.66 million||5.42||$384.89 million||N/A||N/A|
|Hudson Pacific Properties||$680.57 million||7.58||$289.13 million||$0.36||92.31|
Paramount Group has higher revenue and earnings than Hudson Pacific Properties.
Paramount Group Company Profile
Paramount Group, Inc. is a fully-integrated real estate investment trust (REIT) focused on owning, operating, managing, acquiring and redeveloping Class A office properties in select central business district submarkets of New York City, Washington, District of Columbia (D.C.) and San Francisco. The Company conducts its business through, and substantially all its interests in properties and investments are held by, Paramount Group Operating Partnership LP (the Operating Partnership). The Company’s segments include New York, Washington, D.C. and San Francisco. As of December 31, 2016, the Company’s portfolio consisted of 13 Class A office properties aggregating approximately 10.8 million square feet that was 93.3% leased and 90.9% occupied. The Company also has an investment management business, where it serves as the general partner and property manager of certain private equity real estate funds for institutional investors and high-net-worth individuals.
Hudson Pacific Properties Company Profile
Hudson Pacific Properties, Inc. is a real estate investment trust (REIT). The Company operates in two segments: office properties, and media and entertainment properties. The Company is focused on acquiring, repositioning, developing and operating office and media and entertainment properties in submarkets throughout Northern and Southern California and the Pacific Northwest. As of December 31, 2016, the Company’s portfolio included office properties consisting of an aggregate of approximately 14.1 million square feet, and media and entertainment properties consisting of approximately 0.9 million square feet of sound-stage, office and supporting production facilities. As of December 31, 2016, the Company also owned undeveloped density rights for approximately 2.5 million square feet of future office and residential space. The Company’s in-service office properties include stabilized office properties and lease-up office properties.
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