Analyzing Douglas Emmett (NYSE:DEI) and Hudson Pacific Properties (NYSE:HPP)

Douglas Emmett (NYSE:DEI) and Hudson Pacific Properties (NYSE:HPP) are both small-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Douglas Emmett and Hudson Pacific Properties, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Douglas Emmett	1	7	1	0	2.00
Hudson Pacific Properties	3	6	4	0	2.08

Douglas Emmett presently has a consensus target price of $13.71, suggesting a potential upside of 17.37%. Hudson Pacific Properties has a consensus target price of $15.07, suggesting a potential upside of 5.05%. Given Douglas Emmett’s higher probable upside, research analysts plainly believe Douglas Emmett is more favorable than Hudson Pacific Properties.

Profitability

This table compares Douglas Emmett and Hudson Pacific Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Douglas Emmett	-2.27%	-0.66%	-0.24%
Hudson Pacific Properties	-70.04%	-20.76%	-7.73%

Dividends

Douglas Emmett pays an annual dividend of $0.76 per share and has a dividend yield of 6.5%. Hudson Pacific Properties pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Douglas Emmett pays out -506.7% of its earnings in the form of a dividend. Hudson Pacific Properties pays out -1.1% 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. Douglas Emmett is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

97.4% of Douglas Emmett shares are held by institutional investors. Comparatively, 97.6% of Hudson Pacific Properties shares are held by institutional investors. 13.0% of Douglas Emmett shares are held by insiders. Comparatively, 2.5% of Hudson Pacific Properties shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Douglas Emmett has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Hudson Pacific Properties has a beta of 1.9, indicating that its stock price is 90% more volatile than the S&P 500.

Earnings & Valuation

This table compares Douglas Emmett and Hudson Pacific Properties”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Douglas Emmett	$1.00 billion	1.95	$16.27 million	($0.15)	-77.90
Hudson Pacific Properties	$812.79 million	0.96	-$561.69 million	($8.85)	-1.62

Douglas Emmett has higher revenue and earnings than Hudson Pacific Properties. Douglas Emmett is trading at a lower price-to-earnings ratio than Hudson Pacific Properties, indicating that it is currently the more affordable of the two stocks.

Summary

Douglas Emmett beats Hudson Pacific Properties on 11 of the 16 factors compared between the two stocks.

About Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.

About Hudson Pacific Properties

Hudson Pacific Properties (NYSE: HPP) is a real estate investment trust serving dynamic tech and media tenants in global epicenters for these synergistic, converging and secular growth industries. Hudson Pacific's unique and high-barrier tech and media focus leverages a full-service, end-to-end value creation platform forged through deep strategic relationships and niche expertise across identifying, acquiring, transforming and developing properties into world-class amenitized, collaborative and sustainable office and studio space.