Armada Hoffler Properties (NYSE: AHH) and Lexington Realty Trust (NYSE:LXP) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Volatility & Risk

Armada Hoffler Properties has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Lexington Realty Trust has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Insider and Institutional Ownership

81.3% of Armada Hoffler Properties shares are owned by institutional investors. Comparatively, 72.3% of Lexington Realty Trust shares are owned by institutional investors. 16.6% of Armada Hoffler Properties shares are owned by insiders. Comparatively, 3.1% of Lexington Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Armada Hoffler Properties and Lexington Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armada Hoffler Properties 0 2 3 0 2.60
Lexington Realty Trust 1 5 1 0 2.00

Armada Hoffler Properties presently has a consensus price target of $14.70, indicating a potential upside of 3.01%. Lexington Realty Trust has a consensus price target of $10.55, indicating a potential upside of 4.25%. Given Lexington Realty Trust’s higher possible upside, analysts clearly believe Lexington Realty Trust is more favorable than Armada Hoffler Properties.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 5.3%. Lexington Realty Trust pays an annual dividend of $0.70 per share and has a dividend yield of 6.9%. Armada Hoffler Properties pays out 152.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lexington Realty Trust pays out 500.0% 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 raised its dividend for 3 consecutive years and Lexington Realty Trust has raised its dividend for 6 consecutive years. Lexington Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Armada Hoffler Properties and Lexington Realty Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Armada Hoffler Properties $315.03 million 2.84 $65.61 million $0.50 28.54
Lexington Realty Trust $393.09 million 6.19 $316.72 million $0.14 72.29

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

Profitability

This table compares Armada Hoffler Properties and Lexington Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Armada Hoffler Properties 7.78% 6.36% 2.47%
Lexington Realty Trust 9.80% 2.92% 1.13%

Summary

Armada Hoffler Properties beats Lexington Realty Trust on 9 of the 17 factors compared between the two stocks.

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.

About Lexington Realty Trust

Lexington Realty Trust is a real estate investment trust (REIT). The Company owns a portfolio of equity and debt investments in single-tenant commercial properties. As of December 31, 2016, the Company had equity ownership interests in approximately 195 consolidated real estate properties, located in 40 states and containing an aggregate of approximately 43.3 million square feet of space, approximately 96.0% of which was leased. The Company conducts its operations either directly or indirectly through property owner subsidiaries and lender subsidiaries, which are single purpose entities; an operating partnership, Lepercq Corporate Income Fund L.P. (LCIF), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests; Lexington Realty Advisors, Inc. (LRA), a subsidiary of the Company, and investments in joint ventures.

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