Highwoods Properties (NYSE:HIW – Get Free Report) and Annaly Capital Management (NYSE:NLY – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.
Volatility & Risk
Highwoods Properties has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Annaly Capital Management has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings for Highwoods Properties and Annaly Capital Management, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Highwoods Properties | 1 | 5 | 1 | 0 | 2.00 |
| Annaly Capital Management | 0 | 2 | 8 | 0 | 2.80 |
Profitability
This table compares Highwoods Properties and Annaly Capital Management’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Highwoods Properties | 12.37% | 4.33% | 1.70% |
| Annaly Capital Management | 20.70% | 14.95% | 1.60% |
Earnings and Valuation
This table compares Highwoods Properties and Annaly Capital Management”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Highwoods Properties | $825.86 million | 3.78 | $102.25 million | $0.95 | 30.55 |
| Annaly Capital Management | $4.84 billion | 2.57 | $1.00 billion | $1.59 | 13.55 |
Annaly Capital Management has higher revenue and earnings than Highwoods Properties. Annaly Capital Management is trading at a lower price-to-earnings ratio than Highwoods Properties, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
96.3% of Highwoods Properties shares are owned by institutional investors. Comparatively, 51.6% of Annaly Capital Management shares are owned by institutional investors. 1.6% of Highwoods Properties shares are owned by company insiders. Comparatively, 0.2% of Annaly Capital Management shares are owned 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.
Dividends
Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.9%. Annaly Capital Management pays an annual dividend of $2.60 per share and has a dividend yield of 12.1%. Highwoods Properties pays out 210.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Annaly Capital Management pays out 163.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Annaly Capital Management is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Annaly Capital Management beats Highwoods Properties on 10 of the 16 factors compared between the two stocks.
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.
About Annaly Capital Management
Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance. The company invests in agency mortgage-backed securities collateralized by residential mortgages; non-agency residential whole loans and securitized products within the residential and commercial markets; mortgage servicing rights; agency commercial mortgage-backed securities; to-be-announced forward contracts; residential mortgage loans; and agency or private label credit risk transfer securities. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was incorporated in 1996 and is based in New York, New York.
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