Terreno Realty (NYSE:TRNO) & Highwoods Properties (NYSE:HIW) Head-To-Head Analysis

Highwoods Properties (NYSE:HIW) and Terreno Realty (NYSE:TRNO) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Valuation and Earnings

This table compares Highwoods Properties and Terreno Realty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highwoods Properties	$825.86 million	3.41	$102.25 million	$1.17	21.90
Terreno Realty	$382.62 million	16.35	$184.50 million	$3.15	19.21

Terreno Realty has lower revenue, but higher earnings than Highwoods Properties. Terreno Realty is trading at a lower price-to-earnings ratio than Highwoods Properties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Highwoods Properties and Terreno Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highwoods Properties	15.98%	5.48%	2.13%
Terreno Realty	72.41%	8.27%	6.41%

Dividends

Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 7.8%. Terreno Realty pays an annual dividend of $2.08 per share and has a dividend yield of 3.4%. Highwoods Properties pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Terreno Realty pays out 66.0% of its earnings in the form of a dividend. Terreno Realty has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

96.3% of Highwoods Properties shares are owned by institutional investors. 1.9% of Highwoods Properties shares are owned by insiders. Comparatively, 2.4% of Terreno Realty shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Highwoods Properties has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Terreno Realty has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Highwoods Properties and Terreno Realty, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highwoods Properties	1	4	2	0	2.14
Terreno Realty	1	6	6	0	2.38

Highwoods Properties presently has a consensus target price of $31.00, indicating a potential upside of 21.00%. Terreno Realty has a consensus target price of $65.54, indicating a potential upside of 8.33%. Given Highwoods Properties’ higher possible upside, research analysts clearly believe Highwoods Properties is more favorable than Terreno Realty.

Summary

Terreno Realty beats Highwoods Properties on 12 of the 17 factors compared between the two stocks.

About Highwoods Properties

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (REIT) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Highwoods is in the work-placemaking business. We believe that by creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stakeholders.

About Terreno Realty

Terreno Realty Corporation (Terreno, and together with its subsidiaries, the Company) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. All square feet, acres, occupancy and number of properties disclosed in these notes to the consolidated financial statements are unaudited. As of December 31, 2023, the Company owned 259 buildings aggregating approximately 16.0 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development. The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (REIT) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year ended December 31, 2010.