Highwoods Properties (HIW) and Equity Commonwealth (EQC) Critical Analysis
Highwoods Properties (NYSE: HIW) and Equity Commonwealth (NYSE:EQC) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Valuation & Earnings
This table compares Highwoods Properties and Equity Commonwealth’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Highwoods Properties||$683.61 million||7.82||$366.80 million||$1.24||41.77|
|Equity Commonwealth||$409.33 million||9.36||$194.30 million||$0.86||35.91|
Highwoods Properties has higher revenue and earnings than Equity Commonwealth. Equity Commonwealth is trading at a lower price-to-earnings ratio than Highwoods Properties, indicating that it is currently the more affordable of the two stocks.
This table compares Highwoods Properties and Equity Commonwealth’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Highwoods Properties has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Equity Commonwealth has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500.
Institutional & Insider Ownership
98.4% of Highwoods Properties shares are held by institutional investors. Comparatively, 94.5% of Equity Commonwealth shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by insiders. Comparatively, 1.0% of Equity Commonwealth shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Highwoods Properties pays an annual dividend of $1.76 per share and has a dividend yield of 3.4%. Equity Commonwealth does not pay a dividend. Highwoods Properties pays out 141.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a breakdown of current recommendations and price targets for Highwoods Properties and Equity Commonwealth, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Highwoods Properties currently has a consensus price target of $54.67, suggesting a potential upside of 5.53%. Equity Commonwealth has a consensus price target of $32.50, suggesting a potential upside of 5.25%. Given Highwoods Properties’ stronger consensus rating and higher possible upside, research analysts plainly believe Highwoods Properties is more favorable than Equity Commonwealth.
Highwoods Properties beats Equity Commonwealth on 12 of the 16 factors compared between the two stocks.
Highwoods Properties Company Profile
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.
Equity Commonwealth Company Profile
Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of August 14, 2017, the Company’s portfolio included 20 properties and 11 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.
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