Highwoods Properties (NYSE:HIW) & Welltower (NYSE:WELL) Critical Contrast

Welltower (NYSE:WELL) and Highwoods Properties (NYSE:HIW) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Valuation & Earnings

This table compares Welltower and Highwoods Properties”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Welltower	$7.99 billion	17.49	$951.68 million	$1.45	140.45
Highwoods Properties	$825.86 million	3.53	$102.25 million	$1.17	22.69

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

Analyst Recommendations

This is a breakdown of recent recommendations for Welltower and Highwoods Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Welltower	1	1	11	1	2.86
Highwoods Properties	1	4	2	0	2.14

Welltower currently has a consensus price target of $195.87, suggesting a potential downside of 3.82%. Highwoods Properties has a consensus price target of $31.00, suggesting a potential upside of 16.78%. Given Highwoods Properties’ higher possible upside, analysts clearly believe Highwoods Properties is more favorable than Welltower.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Welltower	9.69%	2.71%	1.75%
Highwoods Properties	15.98%	5.48%	2.13%

Institutional & Insider Ownership

94.8% of Welltower shares are held by institutional investors. Comparatively, 96.3% of Highwoods Properties shares are held by institutional investors. 0.2% of Welltower shares are held by company insiders. Comparatively, 1.9% of Highwoods Properties shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Welltower 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 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Dividends

Welltower pays an annual dividend of $2.96 per share and has a dividend yield of 1.5%. Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 7.5%. Welltower pays out 204.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Highwoods Properties pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Welltower has raised its dividend for 2 consecutive years. Highwoods Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Welltower

Welltower Inc. (NYSE:WELL), a real estate investment trust (“REIT”) and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Welltower invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.

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.