Critical Analysis: Columbia Property Trust (CXP) and Armada Hoffler Properties (AHH)

Columbia Property Trust (NYSE: CXP) and Armada Hoffler Properties (NYSE:AHH) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Risk & Volatility

Columbia Property Trust has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Armada Hoffler Properties has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Valuation & Earnings

This table compares Columbia Property Trust and Armada Hoffler Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Columbia Property Trust $473.54 million 5.66 $84.28 million $1.68 13.32
Armada Hoffler Properties $258.39 million 2.71 $28.07 million $0.50 31.18

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

Dividends

Columbia Property Trust pays an annual dividend of $0.80 per share and has a dividend yield of 3.6%. Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 4.9%. Columbia Property Trust pays out 47.6% of its earnings in the form of a dividend. 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. Columbia Property Trust has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

67.4% of Columbia Property Trust shares are held by institutional investors. Comparatively, 82.1% of Armada Hoffler Properties shares are held by institutional investors. 0.5% of Columbia Property Trust shares are held by insiders. Comparatively, 16.6% of Armada Hoffler Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Columbia Property Trust and Armada Hoffler Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Property Trust 63.37% 8.10% 4.91%
Armada Hoffler Properties 7.78% 6.36% 2.47%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Columbia Property Trust and Armada Hoffler Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Property Trust 0 2 5 0 2.71
Armada Hoffler Properties 0 2 4 0 2.67

Columbia Property Trust currently has a consensus target price of $24.17, indicating a potential upside of 8.03%. Armada Hoffler Properties has a consensus target price of $14.70, indicating a potential downside of 5.71%. Given Columbia Property Trust’s stronger consensus rating and higher possible upside, research analysts clearly believe Columbia Property Trust is more favorable than Armada Hoffler Properties.

Summary

Columbia Property Trust beats Armada Hoffler Properties on 14 of the 17 factors compared between the two stocks.

Columbia Property Trust Company Profile

Columbia Property Trust, Inc. operates as a real estate investment trust (REIT), which owns and operates commercial real estate properties. The Company’s primary objective is to generate long-term shareholder returns from a combination of steadily growing cash flows and appreciation in its net asset values, through the acquisition and ownership of office buildings located principally in high-barrier-to-entry markets. The Company’s segments include New York, San Francisco, Atlanta, Washington, D.C., Boston, Los Angeles and all other office markets. The all other office markets segment consists of properties in similar, low-barrier to entry geographic locations, in which the Company does not plan to make further investments. The Company conducts its business primarily through Columbia Property Trust Operating Partnership, L.P. (Columbia Property Trust OP), which acquires, develops, owns, leases and operates real properties directly through subsidiaries or through joint ventures.

Armada Hoffler Properties Company Profile

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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