Head to Head Analysis: TIER REIT (TIER) versus Hudson Pacific Properties (HPP)
TIER REIT (NYSE: TIER) and Hudson Pacific Properties (NYSE:HPP) are both financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.
This table compares TIER REIT and Hudson Pacific Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hudson Pacific Properties||8.98%||1.58%||0.91%|
TIER REIT pays an annual dividend of $0.72 per share and has a dividend yield of 3.5%. Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. TIER REIT pays out 39.1% of its earnings in the form of a dividend. Hudson Pacific Properties pays out 256.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hudson Pacific Properties has increased its dividend for 2 consecutive years. TIER REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares TIER REIT and Hudson Pacific Properties’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TIER REIT||$242.82 million||4.01||-$29.41 million||$1.84||11.05|
|Hudson Pacific Properties||$639.64 million||8.27||$33.06 million||$0.39||86.95|
Hudson Pacific Properties has higher revenue and earnings than TIER REIT. TIER REIT 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.
Insider & Institutional Ownership
57.5% of TIER REIT shares are held by institutional investors. Comparatively, 99.5% of Hudson Pacific Properties shares are held by institutional investors. 1.2% of TIER REIT shares are held by company insiders. Comparatively, 0.3% of Hudson Pacific Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a breakdown of recent ratings and price targets for TIER REIT and Hudson Pacific Properties, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hudson Pacific Properties||0||2||4||0||2.67|
TIER REIT currently has a consensus price target of $21.00, indicating a potential upside of 3.30%. Hudson Pacific Properties has a consensus price target of $38.33, indicating a potential upside of 13.04%. Given Hudson Pacific Properties’ higher probable upside, analysts clearly believe Hudson Pacific Properties is more favorable than TIER REIT.
About TIER REIT
TIER REIT, Inc. is a real estate investment trust. The Company’s business consists of owning, acquiring, developing, operating, investing in, and disposing of real estate assets. The Company’s business is conducted through Tier Operating Partnership LP (Tier OP). As of December 31, 2016, the Company owned interests in 29 operating office properties, one non-operating property and one development property located in 13 markets throughout the United States. It owns properties located in metropolitan cities and suburban markets in the United States. The Company’s office properties include The Terrace Office Park, Domain 3, Domain 4, 5950 Sherry Lane, Burnett Plaza, Loop Central, One BriarLake Plaza, Three Eldridge Place, Eisenhower I, Forum Office Park, 500 E. Pratt, Woodcrest Corporate Center and 111 Woodcrest. The Company’s properties are located in Austin, Dallas, Houston, Charlotte, Nashville, Atlanta and Denver.
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.
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