Brandywine Realty Trust (NYSE:BDN) & Highwoods Properties (NYSE:HIW) Critical Contrast

Highwoods Properties (NYSE:HIW) and Brandywine Realty Trust (NYSE:BDN) are both real estate companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Valuation & Earnings

This table compares Highwoods Properties and Brandywine Realty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highwoods Properties	$806.11 million	4.24	$159.61 million	$1.69	18.35
Brandywine Realty Trust	$484.45 million	1.07	-$178.25 million	($0.80)	-3.81

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

Dividends

Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.4%. Brandywine Realty Trust pays an annual dividend of $0.32 per share and has a dividend yield of 10.5%. Highwoods Properties pays out 118.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brandywine Realty Trust pays out -40.0% of its earnings in the form of a dividend. Brandywine Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings for Highwoods Properties and Brandywine Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highwoods Properties	0	8	0	0	2.00
Brandywine Realty Trust	3	3	0	0	1.50

Highwoods Properties currently has a consensus price target of $32.00, suggesting a potential upside of 3.17%. Brandywine Realty Trust has a consensus price target of $3.50, suggesting a potential upside of 14.94%. Given Brandywine Realty Trust’s higher probable upside, analysts clearly believe Brandywine Realty Trust is more favorable than Highwoods Properties.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Highwoods Properties	22.56%	7.68%	2.98%
Brandywine Realty Trust	-27.60%	-19.24%	-3.97%

Insider & Institutional Ownership

96.3% of Highwoods Properties shares are owned by institutional investors. Comparatively, 87.3% of Brandywine Realty Trust shares are owned by institutional investors. 1.3% of Highwoods Properties shares are owned by company insiders. Comparatively, 4.5% of Brandywine Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Highwoods Properties has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Brandywine Realty Trust has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Summary

Highwoods Properties beats Brandywine Realty Trust on 10 of the 15 factors compared between the two stocks.

About Highwoods Properties

Highwoods Properties, Inc. is a real estate investment trust that owns, develops, leases and manages office properties. Its portfolio is concentrated in business districts across the U.S. Sun Belt, including markets such as Atlanta, Charlotte, Nashville, Raleigh and Tampa. The company provides office space and related property management services to businesses across a range of industries. Its work includes developing and maintaining properties as well as leasing space to commercial tenants. Highwoods is headquartered in Raleigh, North Carolina.

About Brandywine Realty Trust

Brandywine Realty Trust is a self-managed real estate investment trust that owns, leases, develops and manages office and mixed-use properties. Its portfolio includes workplaces and related amenities designed to serve businesses and other tenants. The company’s properties are concentrated in Greater Philadelphia and Austin, Texas, with a strategic focus on urban and transit-oriented locations. Brandywine was formed in 1994 and has since grown through property acquisitions and development. Brandywine also pursues redevelopment and mixed-use projects, combining office space with other uses to create connected commercial districts.