American Assets Trust (NYSE:AAT) and Armada Hoffler Properties (NYSE:AHRT) Critical Survey

Armada Hoffler Properties (NYSE:AHRT) and American Assets Trust (NYSE:AAT) are both small-cap real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Earnings & Valuation

This table compares Armada Hoffler Properties and American Assets Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Armada Hoffler Properties	$289.16 million	1.58	$5.60 million	($0.63)	-9.74
American Assets Trust	$439.74 million	2.98	$71.37 million	$0.29	73.69

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

Insider and Institutional Ownership

66.3% of Armada Hoffler Properties shares are owned by institutional investors. Comparatively, 90.4% of American Assets Trust shares are owned by institutional investors. 9.3% of Armada Hoffler Properties shares are owned by insiders. Comparatively, 37.9% of American Assets Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.56 per share and has a dividend yield of 9.1%. American Assets Trust pays an annual dividend of $1.36 per share and has a dividend yield of 6.4%. Armada Hoffler Properties pays out -88.9% of its earnings in the form of a dividend. American Assets Trust pays out 469.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Assets Trust has raised its dividend for 4 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Armada Hoffler Properties and American Assets Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Armada Hoffler Properties	-18.23%	-0.79%	-0.20%
American Assets Trust	4.09%	1.66%	0.62%

Analyst Ratings

This is a breakdown of recent ratings for Armada Hoffler Properties and American Assets Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Armada Hoffler Properties	1	2	1	1	2.40
American Assets Trust	1	1	0	0	1.50

Armada Hoffler Properties presently has a consensus price target of $7.50, suggesting a potential upside of 22.25%. American Assets Trust has a consensus price target of $21.50, suggesting a potential upside of 0.61%. Given Armada Hoffler Properties’ stronger consensus rating and higher possible upside, research analysts clearly believe Armada Hoffler Properties is more favorable than American Assets Trust.

Risk and Volatility

Armada Hoffler Properties has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, American Assets Trust has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Summary

American Assets Trust beats Armada Hoffler Properties on 11 of the 18 factors compared between the two stocks.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. (the “Company”) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to the ownership of the Company’s operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners and also invests in development projects through real estate financing arrangements. The Company also provides general construction and development services to third-party clients. The Company’s construction and development experience includes mid- and high-rise office buildings, retail strip malls, 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. The Company is the sole general partner of Armada Hoffler, L.P. (the “Operating Partnership”) and, as of March 31, 2024, owned 75.5% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are conducted primarily through the Operating Partnership and the wholly owned subsidiaries thereof.

About American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.