Hudson Pacific Properties (NYSE: HPP) and NorthStar Realty Europe Corp. (NYSE:NRE) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Valuation & Earnings

This table compares Hudson Pacific Properties and NorthStar Realty Europe Corp.’s 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 7.64 $289.13 million $0.36 93.00
NorthStar Realty Europe Corp. $131.25 million 5.59 $37.01 million ($0.45) -29.49

Hudson Pacific 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 Hudson Pacific Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.5%. 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. 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.

Insider and Institutional Ownership

71.2% of NorthStar Realty Europe Corp. shares are held by institutional investors. 0.3% of Hudson Pacific Properties shares are held by company insiders. Comparatively, 2.2% of NorthStar Realty Europe Corp. 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.

Analyst Ratings

This is a summary of current ratings and price targets for Hudson Pacific Properties and NorthStar Realty Europe Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hudson Pacific Properties 0 2 5 0 2.71
NorthStar Realty Europe Corp. 0 0 1 0 3.00

Hudson Pacific Properties presently has a consensus target price of $37.79, suggesting a potential upside of 12.86%. NorthStar Realty Europe Corp. has a consensus target price of $16.50, suggesting a potential upside of 24.34%. Given NorthStar Realty Europe Corp.’s stronger consensus rating and higher possible upside, analysts clearly believe NorthStar Realty Europe Corp. is more favorable than Hudson Pacific Properties.

Volatility and Risk

Hudson Pacific Properties has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, NorthStar Realty Europe Corp. has a beta of 2.49, indicating that its share price is 149% more volatile than the S&P 500.

Profitability

This table compares Hudson Pacific Properties and NorthStar Realty Europe Corp.’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%
NorthStar Realty Europe Corp. -18.57% 7.73% 2.46%

Summary

NorthStar Realty Europe Corp. beats Hudson Pacific Properties on 9 of the 15 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.

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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