Analyzing Highwoods Properties (HIW) and NorthStar Realty Europe Corp. (NRE)
Highwoods Properties (NYSE: HIW) and NorthStar Realty Europe Corp. (NYSE:NRE) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.
Valuation & Earnings
This table compares Highwoods Properties and NorthStar Realty Europe Corp.’s top-line 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|
|NorthStar Realty Europe Corp.||$131.25 million||5.16||$37.01 million||($0.45)||-27.24|
Highwoods Properties has higher revenue and earnings than NorthStar Realty Europe Corp.. NorthStar Realty Europe Corp. is trading at a lower price-to-earnings ratio than Highwoods Properties, indicating that it is currently the more affordable of the two stocks.
Highwoods Properties pays an annual dividend of $1.76 per share and has a dividend yield of 3.4%. NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.9%. 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. NorthStar Realty Europe Corp. pays out -133.3% of its earnings in the form of a dividend. NorthStar Realty Europe Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Highwoods Properties and NorthStar Realty Europe Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NorthStar Realty Europe Corp.||-18.57%||7.73%||2.46%|
Institutional & Insider Ownership
98.4% of Highwoods Properties shares are held by institutional investors. Comparatively, 70.0% of NorthStar Realty Europe Corp. shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by insiders. Comparatively, 2.2% of NorthStar Realty Europe Corp. shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Highwoods Properties and NorthStar Realty Europe Corp., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NorthStar Realty Europe Corp.||0||0||0||0||N/A|
Highwoods Properties currently has a consensus target price of $54.67, indicating a potential upside of 5.53%. Given Highwoods Properties’ higher possible upside, equities research analysts plainly believe Highwoods Properties is more favorable than NorthStar Realty Europe Corp..
Risk & Volatility
Highwoods Properties has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, NorthStar Realty Europe Corp. has a beta of 2.5, suggesting that its share price is 150% more volatile than the S&P 500.
Highwoods Properties beats NorthStar Realty Europe Corp. on 9 of the 14 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.
NorthStar Realty Europe Corp. Company Profile
NorthStar Realty Europe Corp. is a real estate investment trust (REIT). The Company is a European focused commercial real estate company with primary office properties in cities within Germany, the United Kingdom and France. Its objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time. The Company conducts its business through two segments: Real Estate and Corporate. Its European commercial real estate business is primarily focused on office properties. Its portfolio consists of approximately 48 properties and a total of approximately 495,588 square meters of rentable space, located in various European markets, including Frankfurt, Hamburg, Berlin, London, Paris, Amsterdam, Milan, Brussels and Madrid. Its overall portfolio is over 87% occupied. In addition, it owns over two hotels, which are leased to third-party operators. It is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NSAM).
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