Head to Head Analysis: W.P. Carey (NYSE:WPC) and Armada Hoffler Properties (NYSE:AHRT)

Armada Hoffler Properties (NYSE:AHRT) and W.P. Carey (NYSE:WPC) are both real estate companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for Armada Hoffler Properties and W.P. Carey, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Armada Hoffler Properties	2	2	1	1	2.17
W.P. Carey	1	6	7	0	2.43

Armada Hoffler Properties presently has a consensus price target of $7.38, indicating a potential upside of 10.57%. W.P. Carey has a consensus price target of $79.38, indicating a potential upside of 11.32%. Given W.P. Carey’s stronger consensus rating and higher probable upside, analysts plainly believe W.P. Carey is more favorable than Armada Hoffler Properties.

Institutional & Insider Ownership

66.3% of Armada Hoffler Properties shares are held by institutional investors. Comparatively, 73.7% of W.P. Carey shares are held by institutional investors. 9.3% of Armada Hoffler Properties shares are held by company insiders. Comparatively, 1.0% of W.P. Carey shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Armada Hoffler Properties and W.P. Carey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Armada Hoffler Properties	-18.23%	-0.79%	-0.20%
W.P. Carey	36.34%	7.81%	3.58%

Risk and Volatility

Armada Hoffler Properties has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, W.P. Carey has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.56 per share and has a dividend yield of 8.4%. W.P. Carey pays an annual dividend of $3.76 per share and has a dividend yield of 5.3%. Armada Hoffler Properties pays out -88.9% of its earnings in the form of a dividend. W.P. Carey pays out 128.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey has increased its dividend for 2 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Armada Hoffler Properties and W.P. Carey”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Armada Hoffler Properties	$289.16 million	1.72	$5.60 million	($0.63)	-10.59
W.P. Carey	$1.79 billion	9.07	$466.36 million	$2.93	24.34

W.P. Carey has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than W.P. Carey, indicating that it is currently the more affordable of the two stocks.

Summary

W.P. Carey beats Armada Hoffler Properties on 13 of the 18 factors compared between the two stocks.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. (the “Company”) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to the ownership of the Company’s operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners and also invests in development projects through real estate financing arrangements. The Company also provides general construction and development services to third-party clients. The Company’s construction and development experience includes mid- and high-rise office buildings, retail strip malls, retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution, and manufacturing facilities, educational, medical, and special purpose facilities, government projects, parking garages, and mixed-use town centers. The Company is the sole general partner of Armada Hoffler, L.P. (the “Operating Partnership”) and, as of March 31, 2024, owned 75.5% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are conducted primarily through the Operating Partnership and the wholly owned subsidiaries thereof.

About W.P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.