Easterly Government Properties (NYSE: DEA) and Armada Hoffler Properties (NYSE:AHH) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Profitability

This table compares Easterly Government Properties and Armada Hoffler Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Easterly Government Properties 3.40% 0.58% 0.36%
Armada Hoffler Properties 8.04% 7.02% 2.58%

Earnings & Valuation

This table compares Easterly Government Properties and Armada Hoffler Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Easterly Government Properties $116.22 million 6.84 $60.40 million $0.10 207.62
Armada Hoffler Properties $315.03 million 2.83 $65.61 million $0.48 29.60

Armada Hoffler Properties has higher revenue and earnings than Easterly Government Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Easterly Government Properties has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Armada Hoffler Properties has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Easterly Government Properties and Armada Hoffler Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Easterly Government Properties 0 1 2 0 2.67
Armada Hoffler Properties 0 2 4 0 2.67

Easterly Government Properties presently has a consensus price target of $21.83, suggesting a potential upside of 5.17%. Armada Hoffler Properties has a consensus price target of $14.75, suggesting a potential upside of 3.80%. Given Easterly Government Properties’ higher probable upside, analysts plainly believe Easterly Government Properties is more favorable than Armada Hoffler Properties.

Institutional & Insider Ownership

96.2% of Easterly Government Properties shares are owned by institutional investors. Comparatively, 81.4% of Armada Hoffler Properties shares are owned by institutional investors. 18.1% of Easterly Government Properties shares are owned by insiders. Comparatively, 16.6% of Armada Hoffler Properties shares are owned by 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.

Dividends

Easterly Government Properties pays an annual dividend of $1.00 per share and has a dividend yield of 4.8%. Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 5.3%. Easterly Government Properties pays out 1,000.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Armada Hoffler Properties pays out 158.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Armada Hoffler Properties has increased its dividend for 3 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Armada Hoffler Properties beats Easterly Government Properties on 10 of the 16 factors compared between the two stocks.

About Easterly Government Properties

Easterly Government Properties, Inc. is an internally managed real estate investment trust (REIT). The Company focuses on the acquisition, development and management of Class A commercial properties that are leased to the United States Government agencies. The Company leases its properties to such agencies through the United States General Services Administration (GSA). The operations of the Company are carried on primarily through Easterly Government Properties, LP and the subsidiaries of the Operating Partnership. As of December 31, 2016, it had 43 operating properties in the United States, including 40 operating properties that are leased primarily to the United States Government tenant agencies and three operating properties that are entirely leased to private tenants, encompassing approximately 3.1 million square feet in the aggregate. In addition, the Company had one property under development encompassing approximately 0.1 million square feet as of December 31, 2016.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. is a real estate company. The Company is engaged in developing, building, owning and managing institutional-grade office, retail and multifamily properties in various markets throughout the Mid-Atlantic and Southeastern United States. In addition to the ownership of its operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners. It also provides general contracting services to third parties. Its construction and development experience includes mid- and high-rise office buildings, retail strip malls and retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution and manufacturing facilities, educational, medical and special purpose facilities, government projects, parking garages and mixed-use town centers.

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