Financial Analysis: Highwoods Properties (HIW) versus Parkway Properties (PKY)
Highwoods Properties (NYSE: HIW) and Parkway Properties (NYSE:PKY) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.
Risk & Volatility
Highwoods Properties has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Parkway Properties has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.
Insider & Institutional Ownership
98.4% of Highwoods Properties shares are held by institutional investors. Comparatively, 97.3% of Parkway Properties shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by company insiders. Comparatively, 4.9% of Parkway Properties shares are held by company 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.
This table compares Highwoods Properties and Parkway Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Highwoods Properties pays an annual dividend of $1.76 per share and has a dividend yield of 3.4%. Parkway Properties pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. 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 summary of recent ratings for Highwoods Properties and Parkway Properties, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Highwoods Properties presently has a consensus price target of $54.67, indicating a potential upside of 5.53%. Parkway Properties has a consensus price target of $21.60, indicating a potential downside of 5.88%. Given Highwoods Properties’ stronger consensus rating and higher probable upside, research analysts clearly believe Highwoods Properties is more favorable than Parkway Properties.
Earnings & Valuation
This table compares Highwoods Properties and Parkway Properties’ top-line revenue, earnings per share 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|
|Parkway Properties||$182.22 million||6.31||$54.29 million||N/A||N/A|
Highwoods Properties has higher revenue and earnings than Parkway Properties.
Highwoods Properties beats Parkway Properties on 11 of the 14 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 Parkway Properties
Parkway, Inc. is a self-managed real estate investment trust (REIT). The Company owns and operates office properties located in submarkets in Houston, Texas. As of December 31, 2016, the Company’s portfolio consisted of five Class A assets comprising 19 buildings and totaling approximately 8.7 million rentable square feet in the Greenway, Galleria and Westchase submarkets of Houston. In addition, the Company operates a fee-based real estate service (the Third-Party Services Business) through a subsidiary, Eola Office Partners, LLC and its subsidiaries (collectively, Eola), which in total managed approximately 3.8 million square feet (unaudited) for primarily third-party owners, as of December 31, 2016. The Company’s properties include CityWestPlace, San Felipe Plaza, Phoenix Tower, Greenway Plaza and Post Oak Central.
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