Douglas Emmett (NYSE: DEI) and Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Dividends

Douglas Emmett pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. Hannon Armstrong Sustainable Infrastructure Capital pays an annual dividend of $1.32 per share and has a dividend yield of 5.4%. Douglas Emmett pays out 155.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hannon Armstrong Sustainable Infrastructure Capital pays out 244.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett has increased its dividend for 3 consecutive years and Hannon Armstrong Sustainable Infrastructure Capital has increased its dividend for 6 consecutive years. Hannon Armstrong Sustainable Infrastructure Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

96.2% of Douglas Emmett shares are held by institutional investors. Comparatively, 71.5% of Hannon Armstrong Sustainable Infrastructure Capital shares are held by institutional investors. 17.8% of Douglas Emmett shares are held by company insiders. Comparatively, 7.2% of Hannon Armstrong Sustainable Infrastructure Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Douglas Emmett and Hannon Armstrong Sustainable Infrastructure Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Douglas Emmett $788.75 million 8.00 $481.47 million $0.59 65.63
Hannon Armstrong Sustainable Infrastructure Capital $38.87 million 33.16 $28.66 million $0.54 44.98

Douglas Emmett has higher revenue and earnings than Hannon Armstrong Sustainable Infrastructure Capital. Hannon Armstrong Sustainable Infrastructure Capital is trading at a lower price-to-earnings ratio than Douglas Emmett, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Douglas Emmett has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Hannon Armstrong Sustainable Infrastructure Capital has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares Douglas Emmett and Hannon Armstrong Sustainable Infrastructure Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Douglas Emmett 12.00% 2.95% 1.18%
Hannon Armstrong Sustainable Infrastructure Capital 29.99% 8.57% 2.66%

Analyst Recommendations

This is a summary of current ratings and target prices for Douglas Emmett and Hannon Armstrong Sustainable Infrastructure Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Douglas Emmett 2 6 1 0 1.89
Hannon Armstrong Sustainable Infrastructure Capital 0 1 7 0 2.88

Douglas Emmett currently has a consensus target price of $39.71, suggesting a potential upside of 2.57%. Hannon Armstrong Sustainable Infrastructure Capital has a consensus target price of $25.57, suggesting a potential upside of 5.28%. Given Hannon Armstrong Sustainable Infrastructure Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Hannon Armstrong Sustainable Infrastructure Capital is more favorable than Douglas Emmett.

Summary

Hannon Armstrong Sustainable Infrastructure Capital beats Douglas Emmett on 11 of the 17 factors compared between the two stocks.

Douglas Emmett Company Profile

Douglas Emmett, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is owner and operator of office and multifamily properties located in submarkets in Los Angeles and Honolulu. The Company operates through two segments: the acquisition, development, ownership and management of office real estate (Office Segment), and the acquisition, development, ownership and management of multifamily real estate (Multifamily Segment). The services for its Office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for its Multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. It focuses on owning, acquiring developing and managing a substantial share of office properties and multifamily communities in neighborhoods.

Hannon Armstrong Sustainable Infrastructure Capital Company Profile

Hannon Armstrong Sustainable Infrastructure Capital, Inc. makes debt and equity investments in sustainable infrastructure, including energy efficiency and renewable energy. The Company focuses on providing preferred or senior level capital to sponsors and obligors for assets that generate long-term, recurring and predictable cash flows. The Company focuses its investment activities primarily on Energy Efficiency Projects, which include projects typically undertaken by energy service companies, which reduce a building’s or facility’s energy usage or cost by installing various building components, including heating, ventilation and air conditioning systems, lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems, and Renewable Energy Projects, which include projects that deploy cleaner energy sources, such as solar and wind to generate power production. It may also invest in other projects, such as water or communications infrastructure.

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