Highlands REIT (OTCMKTS:HHDS) and Howard Hughes (NYSE:HHH) Critical Contrast

Highlands REIT (OTCMKTS:HHDS) and Howard Hughes (NYSE:HHH) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Risk and Volatility

Highlands REIT has a beta of 26.82, meaning that its share price is 2,582% more volatile than the S&P 500. Comparatively, Howard Hughes has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Highlands REIT and Howard Hughes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highlands REIT	0	0	0	0	N/A
Howard Hughes	0	0	2	0	3.00

Howard Hughes has a consensus target price of $97.00, suggesting a potential upside of 62.40%. Given Howard Hughes’ higher possible upside, analysts clearly believe Howard Hughes is more favorable than Highlands REIT.

Profitability

This table compares Highlands REIT and Howard Hughes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highlands REIT	-33.24%	-4.51%	-3.04%
Howard Hughes	-53.88%	-0.62%	-0.21%

Insider & Institutional Ownership

0.0% of Highlands REIT shares are owned by institutional investors. Comparatively, 93.8% of Howard Hughes shares are owned by institutional investors. 3.7% of Highlands REIT shares are owned by insiders. Comparatively, 33.0% of Howard Hughes shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Highlands REIT and Howard Hughes’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highlands REIT	$30.98 million	0.52	-$10.30 million	($0.01)	-2.22
Howard Hughes	$1.02 billion	2.93	-$550.95 million	($11.13)	-5.37

Highlands REIT has higher earnings, but lower revenue than Howard Hughes. Howard Hughes is trading at a lower price-to-earnings ratio than Highlands REIT, indicating that it is currently the more affordable of the two stocks.

Summary

Howard Hughes beats Highlands REIT on 8 of the 13 factors compared between the two stocks.

About Highlands REIT

We are a self-advised and self-administered real estate investment trust (REIT) created to own and manage substantially all of the non-core investment properties previously owned and managed by our former parent, InvenTrust Properties Corp., a Maryland corporation (InvenTrust). On April 28, 2016, we were spun-off from InvenTrust through a pro rata distribution (the Distribution) by InvenTrust of 100% of the outstanding shares of our common stock to holders of InvenTrust's common stock. Prior to or concurrent with the separation, we and InvenTrust engaged in certain reorganization transactions that were designed to consolidate substantially all of InvenTrust's remaining non-core investment properties in Highlands.

About Howard Hughes

Howard Hughes Holdings Inc., together with its subsidiaries, operates as a real estate development company in the United States. It operates in four segments: Operating Assets; Master Planned Communities (MPCs); Seaport; and Strategic Developments. The Operating Assets segment consists of developed or acquired retail, office, and multi-family properties along with other retail investments. Its MPCs segment develops, sells, and leases residential and commercial land designated for long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona. The Seaport segment is involved in the landlord operations, managed businesses, and events and sponsorships services of its restaurant, retail, and entertain properties in Pier 17, New York City; Historic Area/Uplands; and Tin Building, as well as in 250 Water Street and in the Jean-Georges restaurants. The Strategic Development segment develops and redevelops residential condominiums and commercial properties. It serves homebuilders. Howard Hughes Holdings Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.