Financial Analysis: Hudson Pacific Properties (HPP) versus SL Green Realty Corp (SLG)
Hudson Pacific Properties (NYSE: HPP) and SL Green Realty Corp (NYSE:SLG) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.
Volatility & Risk
Hudson Pacific Properties has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, SL Green Realty Corp has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.
Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 3.1%. SL Green Realty Corp pays an annual dividend of $3.10 per share and has a dividend yield of 3.2%. Hudson Pacific Properties pays out 277.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty Corp pays out 319.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty Corp has raised its dividend for 5 consecutive years. SL Green Realty Corp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and price targets for Hudson Pacific Properties and SL Green Realty Corp, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hudson Pacific Properties||0||2||6||0||2.75|
|SL Green Realty Corp||0||8||6||0||2.43|
Hudson Pacific Properties currently has a consensus price target of $38.21, suggesting a potential upside of 17.11%. SL Green Realty Corp has a consensus price target of $115.91, suggesting a potential upside of 20.15%. Given SL Green Realty Corp’s higher probable upside, analysts clearly believe SL Green Realty Corp is more favorable than Hudson Pacific Properties.
This table compares Hudson Pacific Properties and SL Green Realty Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hudson Pacific Properties||7.87%||1.37%||0.79%|
|SL Green Realty Corp||4.02%||0.48%||0.41%|
Earnings and Valuation
This table compares Hudson Pacific Properties and SL Green Realty Corp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hudson Pacific Properties||$680.57 million||7.45||$289.13 million||$0.36||90.64|
|SL Green Realty Corp||$1.53 billion||6.24||$871.44 million||$0.97||99.45|
SL Green Realty Corp has higher revenue and earnings than Hudson Pacific Properties. Hudson Pacific Properties is trading at a lower price-to-earnings ratio than SL Green Realty Corp, indicating that it is currently the more affordable of the two stocks.
About Hudson Pacific Properties
Hudson Pacific Properties, Inc. is a real estate investment trust (REIT). The Company operates in two segments: office properties, and media and entertainment properties. The Company is focused on acquiring, repositioning, developing and operating office and media and entertainment properties in submarkets throughout Northern and Southern California and the Pacific Northwest. As of December 31, 2016, the Company’s portfolio included office properties consisting of an aggregate of approximately 14.1 million square feet, and media and entertainment properties consisting of approximately 0.9 million square feet of sound-stage, office and supporting production facilities. As of December 31, 2016, the Company also owned undeveloped density rights for approximately 2.5 million square feet of future office and residential space. The Company’s in-service office properties include stabilized office properties and lease-up office properties.
About SL Green Realty Corp
SL Green Realty Corp. is a self-managed real estate investment trust (REIT), with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction and leasing. The Company operates through two segments: real estate, and debt and preferred equity investments. It acquires, owns, repositions, manages and leases commercial office, retail and multifamily properties in the New York Metropolitan area. Its debt and preferred equity activities include purchases and originations, inclusive of advances under future funding obligations, discount and fee amortization, and paid-in-kind interest. As of December 31, 2016, the Company owned or held interests in 24 consolidated commercial office buildings encompassing approximately 16.1 million rentable square feet and seven unconsolidated commercial office buildings encompassing approximately 6.6 million rentable square feet located primarily in midtown Manhattan.
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