Douglas Emmett (NYSE:DEI) and Highwoods Properties (NYSE:HIW) Financial Analysis

Douglas Emmett (NYSE:DEI) and Highwoods Properties (NYSE:HIW) are both real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Risk and Volatility

Douglas Emmett has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Highwoods Properties has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Insider & Institutional Ownership

97.4% of Douglas Emmett shares are owned by institutional investors. Comparatively, 96.3% of Highwoods Properties shares are owned by institutional investors. 13.0% of Douglas Emmett shares are owned by insiders. Comparatively, 1.3% of Highwoods Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Douglas Emmett and Highwoods Properties”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Douglas Emmett	$1.00 billion	1.74	$16.27 million	($0.15)	-69.43
Highwoods Properties	$806.11 million	4.34	$159.61 million	$1.69	18.76

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

Profitability

This table compares Douglas Emmett and Highwoods Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Douglas Emmett	-2.04%	-0.60%	-0.22%
Highwoods Properties	22.56%	7.68%	2.98%

Dividends

Douglas Emmett pays an annual dividend of $0.76 per share and has a dividend yield of 7.3%. Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.3%. Douglas Emmett pays out -506.7% of its earnings in the form of a dividend. Highwoods Properties pays out 118.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and price targets for Douglas Emmett and Highwoods Properties, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Douglas Emmett	1	7	1	0	2.00
Highwoods Properties	0	8	0	0	2.00

Douglas Emmett currently has a consensus target price of $13.14, suggesting a potential upside of 26.19%. Highwoods Properties has a consensus target price of $32.00, suggesting a potential upside of 0.95%. Given Douglas Emmett’s higher possible upside, equities analysts plainly believe Douglas Emmett is more favorable than Highwoods Properties.

Summary

Douglas Emmett beats Highwoods Properties on 8 of the 15 factors compared between the two stocks.

About Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.

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.