Head-To-Head Contrast: Highwoods Properties (HIW) & Hudson Pacific Properties (HPP)
Highwoods Properties (NYSE: HIW) and Hudson Pacific Properties (NYSE:HPP) are both mid-cap financials companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.
Insider & Institutional Ownership
96.6% of Highwoods Properties shares are held by institutional investors. Comparatively, 99.7% of Hudson Pacific Properties shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by insiders. Comparatively, 0.3% of Hudson Pacific Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Highwoods Properties and Hudson Pacific Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hudson Pacific Properties||8.98%||1.58%||0.91%|
Highwoods Properties pays an annual dividend of $1.76 per share and has a dividend yield of 3.5%. Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Highwoods Properties pays out 122.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hudson Pacific Properties pays out 243.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Highwoods Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Highwoods Properties and Hudson Pacific Properties’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Highwoods Properties||$665.63 million||7.91||$524.29 million||$1.44||35.41|
|Hudson Pacific Properties||$639.64 million||8.66||$33.06 million||$0.41||86.61|
Highwoods Properties has higher revenue and earnings than Hudson Pacific Properties. Highwoods Properties is trading at a lower price-to-earnings ratio than Hudson Pacific Properties, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Highwoods Properties has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Hudson Pacific Properties has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Highwoods Properties 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||4||0||2.67|
Highwoods Properties presently has a consensus price target of $54.80, suggesting a potential upside of 7.47%. Hudson Pacific Properties has a consensus price target of $38.33, suggesting a potential upside of 7.95%. Given Hudson Pacific Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Hudson Pacific Properties is more favorable than Highwoods Properties.
Highwoods Properties beats Hudson Pacific Properties on 10 of the 16 factors compared between the two stocks.
About Highwoods Properties
Highwoods Properties, Inc. is an office real estate investment trust (REIT). The Company’s primary business is the operation, acquisition and development of office properties. The Company’s segments include Office and Other. The Company owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa. The Company conducts its activities through Highwoods Realty Limited Partnership (the Operating Partnership). The Company offers a range of real estate services to its customers. The Company offers services, including asset management, construction management, design and space planning, and renovation and re-positioning. The Company provides its customers with services, such as build-to-suit construction and space modification, including tenant improvements and expansions.
About Hudson Pacific Properties
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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