Analyzing Hudson Pacific Properties (HPP) and City Office REIT (CIO)
Hudson Pacific Properties (NYSE: HPP) and City Office REIT (NYSE:CIO) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.
Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 3.1%. City Office REIT pays an annual dividend of $0.94 per share and has a dividend yield of 7.3%. Hudson Pacific Properties pays out 277.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. City Office REIT pays out -723.1% of its earnings in the form of a dividend. City Office REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
53.0% of City Office REIT shares are held by institutional investors. 13.4% of Hudson Pacific Properties shares are held by company insiders. Comparatively, 3.2% of City Office REIT shares are held by company 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.
Valuation and Earnings
This table compares Hudson Pacific Properties and City Office REIT’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hudson Pacific Properties||$680.57 million||7.42||$289.13 million||$0.36||90.36|
|City Office REIT||$90.65 million||4.32||$47.13 million||($0.13)||-99.46|
Hudson Pacific Properties has higher revenue and earnings than City Office REIT. City Office REIT is trading at a lower price-to-earnings ratio than Hudson Pacific Properties, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Hudson Pacific Properties has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, City Office REIT has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500.
This table compares Hudson Pacific Properties and City Office REIT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hudson Pacific Properties||7.87%||1.37%||0.79%|
|City Office REIT||3.70%||1.91%||0.51%|
This is a summary of recent ratings and recommmendations for Hudson Pacific Properties and City Office REIT, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hudson Pacific Properties||0||2||7||0||2.78|
|City Office REIT||0||1||3||0||2.75|
Hudson Pacific Properties presently has a consensus price target of $38.06, indicating a potential upside of 17.01%. City Office REIT has a consensus price target of $14.83, indicating a potential upside of 14.72%. Given Hudson Pacific Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Hudson Pacific Properties is more favorable than City Office REIT.
Hudson Pacific Properties beats City Office REIT on 12 of the 16 factors compared between the two stocks.
Hudson Pacific Properties Company Profile
Hudson Pacific Properties, Inc. is a real estate investment trust (REIT). The Company operates in two segments: office properties, and media and entertainment properties. The Company is focused on acquiring, repositioning, developing and operating office and media and entertainment properties in submarkets throughout Northern and Southern California and the Pacific Northwest. As of December 31, 2016, the Company’s portfolio included office properties consisting of an aggregate of approximately 14.1 million square feet, and media and entertainment properties consisting of approximately 0.9 million square feet of sound-stage, office and supporting production facilities. As of December 31, 2016, the Company also owned undeveloped density rights for approximately 2.5 million square feet of future office and residential space. The Company’s in-service office properties include stabilized office properties and lease-up office properties.
City Office REIT Company Profile
City Office REIT, Inc. is a real estate investment trust. The Company is focused on acquiring, owning and operating office properties located primarily in metropolitan areas in the Southern and Western United States. It conducts its operations primarily through City Office REIT Operating Partnership, L.P. (the Operating Partnership). As of December 31, 2016, it owned 18 office complexes consisting of 37 office buildings with a total of approximately 4.4 million square feet of net rentable area (NRA) in the metropolitan areas of Boise, Dallas, Denver, Orlando, Phoenix, Portland and Tampa. Its properties include Park Tower, City Center, Intellicenter and Carillon Point in Tampa, Florida; Cherry Creek, Plaza 25, DTC Crossroads, Superior Pointe and Logan Tower in Denver, Colorado; Washington Group Plaza in Boise, Idaho; FRP Collection, Central Fairwinds and FRP Ingenuity Drive in Orlando, Florida; 190 Office Center and Lake Vista Pointe in Dallas, Texas, and SanTan in Phoenix, Arizona.
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