Critical Contrast: Highlands REIT (OTCMKTS:HHDS) and W.P. Carey (NYSE:WPC)

Highlands REIT (OTCMKTS:HHDS) and W.P. Carey (NYSE:WPC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

Risk & Volatility

Highlands REIT has a beta of 19.17, meaning that its share price is 1,817% more volatile than the S&P 500. Comparatively, W.P. Carey has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

0.0% of Highlands REIT shares are owned by institutional investors. Comparatively, 73.7% of W.P. Carey shares are owned by institutional investors. 2.3% of Highlands REIT shares are owned by company insiders. Comparatively, 1.0% of W.P. Carey shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Highlands REIT and W.P. Carey, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highlands REIT	0	0	0	0	0.00
W.P. Carey	1	6	6	0	2.38

W.P. Carey has a consensus price target of $77.83, suggesting a potential upside of 2.58%. Given W.P. Carey’s stronger consensus rating and higher probable upside, analysts plainly believe W.P. Carey is more favorable than Highlands REIT.

Profitability

This table compares Highlands REIT and W.P. Carey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highlands REIT	-30.49%	-5.91%	-3.53%
W.P. Carey	29.35%	6.29%	2.86%

Valuation and Earnings

This table compares Highlands REIT 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
Highlands REIT	$37.41 million	0.51	-$11.10 million	($0.01)	-2.67
W.P. Carey	$1.72 billion	9.85	$466.36 million	$2.34	32.42

W.P. Carey has higher revenue and earnings than Highlands REIT. Highlands REIT 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 Highlands REIT on 12 of the 14 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 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.