Head-To-Head Review: Hudson Pacific Properties (NYSE:HPP) versus Whitestone REIT (NYSE:WSR)

Whitestone REIT (NYSE:WSR) and Hudson Pacific Properties (NYSE:HPP) are both small-cap 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.

Volatility & Risk

Whitestone REIT has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Hudson Pacific Properties has a beta of 1.94, suggesting that its share price is 94% more volatile than the S&P 500.

Profitability

This table compares Whitestone REIT and Hudson Pacific Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Whitestone REIT	30.67%	11.12%	4.34%
Hudson Pacific Properties	-67.89%	-19.05%	-7.27%

Earnings & Valuation

This table compares Whitestone REIT and Hudson Pacific Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Whitestone REIT	$160.86 million	6.09	$49.93 million	$0.96	19.87
Hudson Pacific Properties	$814.50 million	1.02	-$561.69 million	($10.10)	-1.51

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

Dividends

Whitestone REIT pays an annual dividend of $0.57 per share and has a dividend yield of 3.0%. Hudson Pacific Properties pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Whitestone REIT pays out 59.4% of its earnings in the form of a dividend. Hudson Pacific Properties pays out -1.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Whitestone REIT has raised its dividend for 5 consecutive years. Whitestone REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Whitestone REIT and Hudson Pacific Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Whitestone REIT	0	9	1	0	2.10
Hudson Pacific Properties	2	6	4	1	2.31

Whitestone REIT currently has a consensus target price of $17.50, indicating a potential downside of 8.26%. Hudson Pacific Properties has a consensus target price of $14.82, indicating a potential downside of 2.94%. Given Hudson Pacific Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Hudson Pacific Properties is more favorable than Whitestone REIT.

Institutional and Insider Ownership

69.5% of Whitestone REIT shares are owned by institutional investors. Comparatively, 97.6% of Hudson Pacific Properties shares are owned by institutional investors. 3.2% of Whitestone REIT shares are owned by company insiders. Comparatively, 2.5% of Hudson Pacific Properties 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.

Summary

Whitestone REIT beats Hudson Pacific Properties on 10 of the 18 factors compared between the two stocks.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy.

About Hudson Pacific Properties

Hudson Pacific Properties (NYSE: HPP) is a real estate investment trust serving dynamic tech and media tenants in global epicenters for these synergistic, converging and secular growth industries. Hudson Pacific's unique and high-barrier tech and media focus leverages a full-service, end-to-end value creation platform forged through deep strategic relationships and niche expertise across identifying, acquiring, transforming and developing properties into world-class amenitized, collaborative and sustainable office and studio space.