Contrasting Easterly Government Properties (NYSE:DEA) and Highlands REIT (OTCMKTS:HHDS)

Highlands REIT (OTCMKTS:HHDS) and Easterly Government Properties (NYSE:DEA) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Institutional and Insider Ownership

0.0% of Highlands REIT shares are held by institutional investors. Comparatively, 86.5% of Easterly Government Properties shares are held by institutional investors. 4.0% of Highlands REIT shares are held by insiders. Comparatively, 7.8% of Easterly Government Properties shares are held by 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 and Risk

Highlands REIT has a beta of 17.65, indicating that its share price is 1,665% more volatile than the S&P 500. Comparatively, Easterly Government Properties has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Valuation and Earnings

This table compares Highlands REIT and Easterly Government Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highlands REIT	$36.08 million	0.83	-$1.00 million	N/A	N/A
Easterly Government Properties	$302.05 million	3.57	$19.55 million	$0.30	78.00

Easterly Government Properties has higher revenue and earnings than Highlands REIT.

Analyst Recommendations

This is a summary of recent ratings and price targets for Highlands REIT and Easterly Government Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highlands REIT	0	0	0	0	0.00
Easterly Government Properties	2	2	2	0	2.00

Easterly Government Properties has a consensus price target of $24.99, suggesting a potential upside of 6.80%. Given Easterly Government Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Easterly Government Properties is more favorable than Highlands REIT.

Profitability

This table compares Highlands REIT and Easterly Government Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highlands REIT	-25.09%	-4.66%	-2.80%
Easterly Government Properties	4.24%	1.00%	0.42%

Summary

Easterly Government Properties beats Highlands REIT on 12 of the 13 factors compared between the two stocks.

About Highlands REIT

We are a self-advised and self-administered real estate investment trust (REIT) created to own and manage substantially all of the non-core investment properties previously owned and managed by our former parent, InvenTrust Properties Corp., a Maryland corporation (InvenTrust). On April 28, 2016, we were spun-off from InvenTrust through a pro rata distribution (the Distribution) by InvenTrust of 100% of the outstanding shares of our common stock to holders of InvenTrust's common stock. Prior to or concurrent with the separation, we and InvenTrust engaged in certain reorganization transactions that were designed to consolidate substantially all of InvenTrust's remaining non-core investment properties in Highlands.

About Easterly Government Properties

Easterly Government Properties, Inc. (NYSE: DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).