Comparing Postal Realty Trust (NYSE:PSTL) and Highwoods Properties (NYSE:HIW)

Postal Realty Trust (NYSE:PSTL) and Highwoods Properties (NYSE:HIW) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility & Risk

Postal Realty Trust has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, Highwoods Properties has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Earnings and Valuation

This table compares Postal Realty Trust and Highwoods Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Postal Realty Trust	$86.54 million	4.02	$6.60 million	$0.38	38.46
Highwoods Properties	$825.86 million	3.80	$102.25 million	$1.19	24.43

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

Dividends

Postal Realty Trust pays an annual dividend of $0.97 per share and has a dividend yield of 6.6%. Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.9%. Postal Realty Trust pays out 255.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Highwoods Properties pays out 168.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Postal Realty Trust has increased its dividend for 3 consecutive years. Highwoods Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings for Postal Realty Trust and Highwoods Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Postal Realty Trust	0	0	1	0	3.00
Highwoods Properties	0	5	1	0	2.17

Postal Realty Trust presently has a consensus target price of $17.75, indicating a potential upside of 21.44%. Highwoods Properties has a consensus target price of $32.00, indicating a potential upside of 10.08%. Given Postal Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Postal Realty Trust is more favorable than Highwoods Properties.

Institutional and Insider Ownership

57.9% of Postal Realty Trust shares are owned by institutional investors. Comparatively, 96.3% of Highwoods Properties shares are owned by institutional investors. 13.7% of Postal Realty Trust shares are owned by company insiders. Comparatively, 1.9% of Highwoods Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Postal Realty Trust and Highwoods Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Postal Realty Trust	13.03%	3.56%	1.73%
Highwoods Properties	16.15%	5.57%	2.16%

Summary

Highwoods Properties beats Postal Realty Trust on 10 of the 16 factors compared between the two stocks.

About Postal Realty Trust

Postal Realty Trust, Inc. (NYSE: PSTL) is an internally managed real estate investment trust that owns properties primarily leased to the United States Postal Service ("USPS"). PSTL is focused on acquiring the network of USPS properties, which provide a critical element of the nation's logistics infrastructure that facilitates cost effective and efficient last-mile delivery solutions. As of December 31, 2023, PSTL owned 1,509 properties (including two properties accounted for as financing leases) located in 49 states and one territory comprising approximately 5.9 million net leasable interior square feet. Subsequent to quarter-end and through February 23, 2024, PSTL closed on eight additional properties comprising approximately 33,000 net leasable interior square feet.

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.