Critical Survey: CBRE Group (CBRE) vs. Hudson Pacific Properties (HPP)

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CBRE Group (NYSE: CBRE) and Hudson Pacific Properties (NYSE:HPP) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for CBRE Group and Hudson Pacific Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBRE Group 0 3 7 1 2.82
Hudson Pacific Properties 0 3 8 0 2.73

CBRE Group currently has a consensus target price of $48.61, indicating a potential downside of 0.06%. Hudson Pacific Properties has a consensus target price of $37.82, indicating a potential upside of 8.02%. Given Hudson Pacific Properties’ higher possible upside, analysts clearly believe Hudson Pacific Properties is more favorable than CBRE Group.

Insider & Institutional Ownership

93.0% of CBRE Group shares are held by institutional investors. 0.9% of CBRE Group shares are held by company insiders. Comparatively, 1.9% of Hudson Pacific Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares CBRE Group and Hudson Pacific Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CBRE Group $14.21 billion 1.16 $691.47 million $2.71 17.95
Hudson Pacific Properties $728.14 million 7.53 $67.96 million $1.99 17.59

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

Dividends

Hudson Pacific Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. CBRE Group does not pay a dividend. Hudson Pacific Properties pays out 50.3% of its earnings in the form of a dividend. Hudson Pacific Properties has raised its dividend for 2 consecutive years.

Volatility and Risk

CBRE Group has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, Hudson Pacific Properties has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
CBRE Group 4.48% 24.15% 8.43%
Hudson Pacific Properties 13.47% 2.44% 1.44%

Summary

CBRE Group beats Hudson Pacific Properties on 11 of the 18 factors compared between the two stocks.

About CBRE Group

CBRE Group, Inc. operates as a commercial real estate services and investment company worldwide. It operates through Americas; Europe, Middle East and Africa; Asia Pacific; Global Investment Management; and Development Services segments. The company offers strategic advice and execution to owners, investors, and occupiers of real estate in connection with leasing; integrated property sales, and mortgage and structured financing services under the CBRE Capital Markets brand; and valuation services that include market value appraisals, litigation support, discounted cash flow analyses, and feasibility studies, as well as consulting services, such as property condition reports, hotel advisory, and environmental consulting. It also provides facilities management, project management, transaction management, and strategic consulting services to occupiers of real estate; and property management services comprising construction management, marketing, building engineering, accounting, and financial services for owners/investors in office, industrial, and retail properties. In addition, the company provides investment management services under the CBRE Global Investors brand to pension funds, insurance companies, sovereign wealth funds, foundations, endowments, and other institutional investors; and development services under the Trammell Crow Company brand name primarily to users of and investors in commercial real estate. CBRE Group, Inc. was founded in 1906 and is headquartered in Los Angeles, California.

About Hudson Pacific Properties

Hudson Pacific Properties is a vertically integrated real estate Company focused on acquiring, repositioning, developing and operating high-quality office and state-of-the-art studio properties in select West Coast markets. Hudson Pacific invests across the risk-return spectrum, favoring opportunities where it can employ leasing, capital investment and management expertise to create additional value. Founded in 2006 as Hudson Capital, the Company went public in 2010, electing to be taxed as a real estate investment trust. Through the years, Hudson Pacific has strategically assembled a portfolio in high-growth, high-barrier-to-entry submarkets throughout Northern and Southern California and the Pacific Northwest. The Company is a leading provider of design-forward, next-generation workspaces for a variety of tenants, with a focus on Fortune 500 and industry-leading growth companies, many in the technology, studio sectors. As a long-term owner, Hudson Pacific prioritizes tenant satisfaction and retention, providing highly customized build-outs and working proactively to accommodate tenants' growth. Hudson Pacific trades as a component of the Russell 2000® and the Russell 3000® indices. For more information visit hudsonpacificproperties.com.

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