Armada Hoffler Properties (NYSE: AHH) and PS Business Parks (NYSE:PSB) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Armada Hoffler Properties and PS Business Parks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armada Hoffler Properties 0 2 3 0 2.60
PS Business Parks 1 0 0 0 1.00

Armada Hoffler Properties presently has a consensus price target of $14.70, indicating a potential upside of 13.08%. PS Business Parks has a consensus price target of $107.00, indicating a potential downside of 18.08%. Given Armada Hoffler Properties’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Armada Hoffler Properties is more favorable than PS Business Parks.

Valuation & Earnings

This table compares Armada Hoffler Properties and PS Business Parks’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Armada Hoffler Properties $315.03 million 2.59 $65.61 million $0.48 27.08
PS Business Parks $394.93 million 9.00 $261.16 million $3.06 42.68

PS Business Parks has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 5.8%. PS Business Parks pays an annual dividend of $3.40 per share and has a dividend yield of 2.6%. Armada Hoffler Properties pays out 158.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks pays out 111.1% 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 increased its dividend for 3 consecutive years and PS Business Parks has increased its dividend for 3 consecutive years.

Insider & Institutional Ownership

62.4% of Armada Hoffler Properties shares are held by institutional investors. Comparatively, 71.3% of PS Business Parks shares are held by institutional investors. 20.9% of Armada Hoffler Properties shares are held by company insiders. Comparatively, 1.6% of PS Business Parks shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Armada Hoffler Properties and PS Business Parks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Armada Hoffler Properties 8.04% 7.02% 2.58%
PS Business Parks 39.05% 16.50% 7.61%

Volatility and Risk

Armada Hoffler Properties has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Summary

PS Business Parks beats Armada Hoffler Properties on 11 of the 16 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.

PS Business Parks Company Profile

PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust (REIT). The Company owns, operates and develops commercial properties, primarily multi-tenant flex, office and industrial parks. It focuses on owning concentrated business parks. PS Business Parks, L.P. (the Operating Partnership) is a California limited partnership, which owns directly or indirectly substantially all of its assets and through, which the Company conducts substantially all of its business. PSB is the partner of the Operating Partnership and, as of December 31, 2016, owned 77.9% of the common partnership units. The remaining common partnership units are owned by Public Storage (PS). As of December 31, 2016, the Company owned and operated 28.1 million rentable square feet of commercial space, comprising 99 business parks, in the states, including California, Texas, Virginia, Florida, Maryland and Washington. It also manages 684,000 rentable square feet on behalf of PS.

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