Head to Head Comparison: Howard Hughes (NYSE:HHC) versus Pennsylvania R.E.I.T. (NYSE:PEI)

Howard Hughes (NYSE:HHC) and Pennsylvania R.E.I.T. (NYSE:PEI) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Insider & Institutional Ownership

82.2% of Howard Hughes shares are owned by institutional investors. Comparatively, 67.9% of Pennsylvania R.E.I.T. shares are owned by institutional investors. 7.5% of Howard Hughes shares are owned by company insiders. Comparatively, 3.1% of Pennsylvania R.E.I.T. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Pennsylvania R.E.I.T. pays an annual dividend of $0.84 per share and has a dividend yield of 18.5%. Howard Hughes does not pay a dividend. Pennsylvania R.E.I.T. pays out 54.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and target prices for Howard Hughes and Pennsylvania R.E.I.T., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Howard Hughes 0 0 1 0 3.00
Pennsylvania R.E.I.T. 2 1 1 0 1.75

Howard Hughes presently has a consensus price target of $159.00, suggesting a potential upside of 22.76%. Pennsylvania R.E.I.T. has a consensus price target of $6.67, suggesting a potential upside of 46.52%. Given Pennsylvania R.E.I.T.’s higher probable upside, analysts plainly believe Pennsylvania R.E.I.T. is more favorable than Howard Hughes.

Risk and Volatility

Howard Hughes has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Pennsylvania R.E.I.T. has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Valuation and Earnings

This table compares Howard Hughes and Pennsylvania R.E.I.T.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Howard Hughes $1.06 billion 5.25 $57.01 million $1.32 98.12
Pennsylvania R.E.I.T. $362.40 million 0.97 -$110.33 million $1.54 2.95

Howard Hughes has higher revenue and earnings than Pennsylvania R.E.I.T.. Pennsylvania R.E.I.T. is trading at a lower price-to-earnings ratio than Howard Hughes, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Howard Hughes and Pennsylvania R.E.I.T.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Howard Hughes 7.03% 3.24% 1.42%
Pennsylvania R.E.I.T. -28.45% -18.31% -4.14%

Summary

Howard Hughes beats Pennsylvania R.E.I.T. on 12 of the 15 factors compared between the two stocks.

Howard Hughes Company Profile

The Howard Hughes Corporation owns, manages, and develops commercial, residential, and hospitality operating properties in the United States. It operates through three segments: Operating Assets, Master Planned Communities, and Strategic Developments. The Operating Assets segment owns 15 retail, 28 office, 8 multi-family, and 4 hospitality properties, as well as 10 other operating assets and investments primarily located and around The Woodlands, Texas; Columbia, Maryland; New York, New York; Las Vegas, Nevada; and Honolulu, Hawai’i. The Master Planned Communities segment develops and sells residential and commercial land. This segment sells residential land designated for detached and attached single family homes ranging from entry-level to luxury homes; and commercial land parcels designated for retail, office, hospitality, and high density residential projects, as well as services and other for-profit activities, and parcels designated for use by government, schools, and other not-for-profit entities. As of December 31, 2018, this segment had 10,543 remaining saleable acres of land. The Strategic Development segment comprises residential condominium and commercial property projects. This segment consist of 29 development or redevelopment projects. The company was founded in 2010 and is headquartered in Dallas, Texas.

Pennsylvania R.E.I.T. Company Profile

PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely-populated eastern U.S. with concentrations in the mid-Atlantic's top MSAs. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures.

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