Hannon Armstrong Sustainable Infrastructure Capital (NYSE: HASI) and Vornado Realty Trust (NYSE:VNO) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Valuation and Earnings

This table compares Hannon Armstrong Sustainable Infrastructure Capital and Vornado Realty Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hannon Armstrong Sustainable Infrastructure Capital $38.87 million 32.29 $28.66 million $0.54 43.80
Vornado Realty Trust $2.70 billion 5.20 $1.40 billion $4.64 15.96

Vornado Realty Trust has higher revenue and earnings than Hannon Armstrong Sustainable Infrastructure Capital. Vornado Realty Trust is trading at a lower price-to-earnings ratio than Hannon Armstrong Sustainable Infrastructure Capital, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Hannon Armstrong Sustainable Infrastructure Capital has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Vornado Realty Trust has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares Hannon Armstrong Sustainable Infrastructure Capital and Vornado Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hannon Armstrong Sustainable Infrastructure Capital 29.99% 8.57% 2.66%
Vornado Realty Trust 37.96% 4.51% 1.39%

Dividends

Hannon Armstrong Sustainable Infrastructure Capital pays an annual dividend of $1.32 per share and has a dividend yield of 5.6%. Vornado Realty Trust pays an annual dividend of $2.40 per share and has a dividend yield of 3.2%. Hannon Armstrong Sustainable Infrastructure Capital pays out 244.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vornado Realty Trust pays out 51.7% of its earnings in the form of a dividend. Vornado Realty Trust has raised its dividend for 3 consecutive years.

Institutional and Insider Ownership

69.3% of Hannon Armstrong Sustainable Infrastructure Capital shares are owned by institutional investors. Comparatively, 87.2% of Vornado Realty Trust shares are owned by institutional investors. 7.2% of Hannon Armstrong Sustainable Infrastructure Capital shares are owned by company insiders. Comparatively, 9.8% of Vornado Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Hannon Armstrong Sustainable Infrastructure Capital and Vornado Realty Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hannon Armstrong Sustainable Infrastructure Capital 0 1 7 0 2.88
Vornado Realty Trust 0 4 4 0 2.50

Hannon Armstrong Sustainable Infrastructure Capital currently has a consensus target price of $25.57, indicating a potential upside of 8.12%. Vornado Realty Trust has a consensus target price of $99.14, indicating a potential upside of 33.87%. Given Vornado Realty Trust’s higher possible upside, analysts plainly believe Vornado Realty Trust is more favorable than Hannon Armstrong Sustainable Infrastructure Capital.

Summary

Vornado Realty Trust beats Hannon Armstrong Sustainable Infrastructure Capital on 10 of the 17 factors compared between the two stocks.

Hannon Armstrong Sustainable Infrastructure Capital Company Profile

Hannon Armstrong Sustainable Infrastructure Capital, Inc. makes debt and equity investments in sustainable infrastructure, including energy efficiency and renewable energy. The Company focuses on providing preferred or senior level capital to sponsors and obligors for assets that generate long-term, recurring and predictable cash flows. The Company focuses its investment activities primarily on Energy Efficiency Projects, which include projects typically undertaken by energy service companies, which reduce a building’s or facility’s energy usage or cost by installing various building components, including heating, ventilation and air conditioning systems, lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems, and Renewable Energy Projects, which include projects that deploy cleaner energy sources, such as solar and wind to generate power production. It may also invest in other projects, such as water or communications infrastructure.

Vornado Realty Trust Company Profile

Vornado Realty Trust is a real estate investment trust (REIT). The Company conducts its business through Vornado Realty L.P. (the Operating Partnership). The Company operates through two segments: New York and Washington, DC. As of December 31, 2016, the Company’s New York segment consisted of 28.3 million square feet in 86 properties. Its properties include 1290 Avenue of the Americas, Two Penn Plaza, 770 Broadway and 90 Park Avenue. As of December 31, 2016, the Company’s Washington, DC segment consisted of 58 properties aggregating 14.7 million square feet, including 11.1 million square feet of office space in 44 properties, nine residential properties containing 3,156 units and a hotel property. Its properties include 2001 Jefferson Davis Highway, 223 23rd Street, 2221 South Clark Street and 1700 M Street. The Company’s interests in properties are held by the Operating Partnership. As of December 31, 2016, the Company owned the 3.7 million square foot Mart (theMart) in Chicago.

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