Critical Survey: Global Medical REIT (NYSE:GMRE) and Highwoods Properties (NYSE:HIW)

Highwoods Properties (NYSE:HIW) and Global Medical REIT (NYSE:GMRE) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Insider and Institutional Ownership

96.3% of Highwoods Properties shares are held by institutional investors. Comparatively, 57.5% of Global Medical REIT shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by insiders. Comparatively, 8.5% of Global Medical REIT shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.9%. Global Medical REIT pays an annual dividend of $3.00 per share and has a dividend yield of 9.2%. Highwoods Properties pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Medical REIT pays out -1,200.0% of its earnings in the form of a dividend. Global Medical REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Highwoods Properties and Global Medical REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highwoods Properties	15.98%	5.48%	2.13%
Global Medical REIT	0.79%	0.25%	0.09%

Earnings and Valuation

This table compares Highwoods Properties and Global Medical REIT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highwoods Properties	$808.28 million	3.96	$102.25 million	$1.17	24.89
Global Medical REIT	$138.78 million	3.16	$6.63 million	($0.25)	-130.88

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

Analyst Ratings

This is a breakdown of current recommendations for Highwoods Properties and Global Medical REIT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highwoods Properties	1	4	2	0	2.14
Global Medical REIT	1	2	3	1	2.57

Highwoods Properties presently has a consensus target price of $31.00, indicating a potential upside of 6.46%. Global Medical REIT has a consensus target price of $41.50, indicating a potential upside of 26.83%. Given Global Medical REIT’s stronger consensus rating and higher probable upside, analysts plainly believe Global Medical REIT is more favorable than Highwoods Properties.

Volatility and Risk

Highwoods Properties has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Global Medical REIT has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Summary

Highwoods Properties beats Global Medical REIT on 10 of the 17 factors compared between the two stocks.

About Highwoods Properties

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (REIT) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Highwoods is in the work-placemaking business. We believe that by creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stakeholders.

About Global Medical REIT

Global Medical REIT Inc. (GMRE) is a net-lease medical office real estate investment trust (REIT) that owns and acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems.