Highwoods Properties (NYSE:HIW) and SOTHERLY HOTELS/SH SH (NASDAQ:SOHO) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.
This is a summary of current ratings and price targets for Highwoods Properties and SOTHERLY HOTELS/SH SH, as reported by MarketBeat.
Highwoods Properties currently has a consensus price target of $52.80, indicating a potential upside of 25.27%. SOTHERLY HOTELS/SH SH has a consensus price target of $7.00, indicating a potential upside of 7.86%. Given Highwoods Properties’ stronger consensus rating and higher probable upside, research analysts plainly believe Highwoods Properties is more favorable than SOTHERLY HOTELS/SH SH.
Risk & Volatility
Highwoods Properties has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, SOTHERLY HOTELS/SH SH has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.
Earnings & Valuation
This table compares Highwoods Properties and SOTHERLY HOTELS/SH SH’s gross revenue, earnings per share and valuation.
Highwoods Properties has higher revenue and earnings than SOTHERLY HOTELS/SH SH. SOTHERLY HOTELS/SH SH is trading at a lower price-to-earnings ratio than Highwoods Properties, indicating that it is currently the more affordable of the two stocks.
This table compares Highwoods Properties and SOTHERLY HOTELS/SH SH’s net margins, return on equity and return on assets.
Highwoods Properties pays an annual dividend of $1.85 per share and has a dividend yield of 4.4%. SOTHERLY HOTELS/SH SH pays an annual dividend of $0.50 per share and has a dividend yield of 7.7%. Highwoods Properties pays out 56.4% of its earnings in the form of a dividend. SOTHERLY HOTELS/SH SH pays out 50.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Highwoods Properties has increased its dividend for 2 consecutive years and SOTHERLY HOTELS/SH SH has increased its dividend for 5 consecutive years. SOTHERLY HOTELS/SH SH is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
91.8% of Highwoods Properties shares are held by institutional investors. Comparatively, 34.0% of SOTHERLY HOTELS/SH SH shares are held by institutional investors. 2.0% of Highwoods Properties shares are held by company insiders. Comparatively, 14.7% of SOTHERLY HOTELS/SH SH shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Highwoods Properties beats SOTHERLY HOTELS/SH SH on 13 of the 17 factors compared between the two stocks.
About Highwoods Properties
Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW) real estate investment trust (REIT) and a member of the S&P MidCap 400 Index. The Company is a fully-integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa.
About SOTHERLY HOTELS/SH SH
Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Currently, the Company’s portfolio consists of investments in twelve hotel properties, comprising 3,156 rooms, and an interest in the Hyde Resort & Residences, a luxury condo hotel. The Company owns hotels that operate under the Hilton Worldwide, InterContinental Hotels Group and Marriott International, Inc. brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.