Armada Hoffler Properties (NYSE: AHH) and Washington Real Estate Investment Trust (NYSE:WRE) are both financials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

82.1% of Armada Hoffler Properties shares are held by institutional investors. Comparatively, 85.6% of Washington Real Estate Investment Trust shares are held by institutional investors. 16.6% of Armada Hoffler Properties shares are held by insiders. Comparatively, 0.6% of Washington Real Estate Investment Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Armada Hoffler Properties and Washington Real Estate Investment Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armada Hoffler Properties 0 2 4 0 2.67
Washington Real Estate Investment Trust 0 2 4 0 2.67

Armada Hoffler Properties presently has a consensus target price of $14.70, indicating a potential downside of 3.48%. Washington Real Estate Investment Trust has a consensus target price of $34.30, indicating a potential upside of 7.93%. Given Washington Real Estate Investment Trust’s higher possible upside, analysts clearly believe Washington Real Estate Investment Trust is more favorable than Armada Hoffler Properties.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 5.0%. Washington Real Estate Investment Trust pays an annual dividend of $1.20 per share and has a dividend yield of 3.8%. Armada Hoffler Properties pays out 161.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Washington Real Estate Investment Trust pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Armada Hoffler Properties has raised its dividend for 3 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Armada Hoffler Properties and Washington Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Armada Hoffler Properties 7.78% 6.36% 2.47%
Washington Real Estate Investment Trust 7.10% 2.10% 0.98%

Risk and Volatility

Armada Hoffler Properties has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Washington Real Estate Investment Trust has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Valuation and Earnings

This table compares Armada Hoffler Properties and Washington Real Estate Investment Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Armada Hoffler Properties $258.39 million 2.65 $28.07 million $0.47 32.40
Washington Real Estate Investment Trust $313.26 million 7.96 $119.33 million $0.30 105.93

Washington Real Estate Investment Trust has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than Washington Real Estate Investment Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Armada Hoffler Properties beats Washington Real Estate Investment Trust on 8 of the 15 factors compared between the two stocks.

Armada Hoffler Properties Company Profile

Armada Hoffler Properties, Inc. is a real estate company. The Company is engaged in developing, building, owning and managing institutional-grade office, retail and multifamily properties in various markets throughout the Mid-Atlantic and Southeastern United States. In addition to the ownership of its operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners. It also provides general contracting services to third parties. Its construction and development experience includes mid- and high-rise office buildings, retail strip malls and retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution and manufacturing facilities, educational, medical and special purpose facilities, government projects, parking garages and mixed-use town centers.

Washington Real Estate Investment Trust Company Profile

Washington Real Estate Investment Trust is a self-administered equity real estate investment trust. The Company’s business consists of the ownership and operation of real property in the greater Washington metro region. The Company owns a diversified portfolio of office buildings, multifamily buildings and retail centers. The Company’s segments include office, multifamily and retail. The Company’s office properties provide office space for various types of businesses and professions. The Company’s multifamily properties provide rental housing for individuals and families throughout the Washington metro region. Its retail properties are typically grocery store anchored neighborhood centers that include other small shop tenants or regional power centers with various junior box tenants. As of April 4, 2017, it owned a diversified portfolio of 50 properties, totaling approximately 6.0 million square feet of commercial space and 4,480 residential units, and land held for development.

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