Critical Review: CubeSmart (NYSE:CUBE) and Howard Hughes (NYSE:HHH)

Howard Hughes (NYSE:HHH) and CubeSmart (NYSE:CUBE) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Profitability

This table compares Howard Hughes and CubeSmart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Howard Hughes	6.57%	3.38%	1.03%
CubeSmart	37.79%	14.33%	6.48%

Earnings & Valuation

This table compares Howard Hughes and CubeSmart”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Howard Hughes	$1.20 billion	3.09	-$550.95 million	$1.51	48.75
CubeSmart	$1.05 billion	8.88	$410.76 million	$1.77	23.31

CubeSmart has lower revenue, but higher earnings than Howard Hughes. CubeSmart is trading at a lower price-to-earnings ratio than Howard Hughes, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

93.8% of Howard Hughes shares are held by institutional investors. Comparatively, 97.6% of CubeSmart shares are held by institutional investors. 33.0% of Howard Hughes shares are held by company insiders. Comparatively, 1.7% of CubeSmart 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.

Analyst Recommendations

This is a summary of current recommendations for Howard Hughes and CubeSmart, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Howard Hughes	0	0	2	0	3.00
CubeSmart	0	7	4	0	2.36

Howard Hughes currently has a consensus price target of $82.00, indicating a potential upside of 11.40%. CubeSmart has a consensus price target of $49.73, indicating a potential upside of 20.53%. Given CubeSmart’s higher possible upside, analysts clearly believe CubeSmart is more favorable than Howard Hughes.

Risk and Volatility

Howard Hughes has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, CubeSmart has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Summary

CubeSmart beats Howard Hughes on 9 of the 14 factors compared between the two stocks.

About Howard Hughes

Howard Hughes Holdings Inc., together with its subsidiaries, operates as a real estate development company in the United States. It operates in four segments: Operating Assets; Master Planned Communities (MPCs); Seaport; and Strategic Developments. The Operating Assets segment consists of developed or acquired retail, office, and multi-family properties along with other retail investments. Its MPCs segment develops, sells, and leases residential and commercial land designated for long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona. The Seaport segment is involved in the landlord operations, managed businesses, and events and sponsorships services of its restaurant, retail, and entertain properties in Pier 17, New York City; Historic Area/Uplands; and Tin Building, as well as in 250 Water Street and in the Jean-Georges restaurants. The Strategic Development segment develops and redevelops residential condominiums and commercial properties. It serves homebuilders. Howard Hughes Holdings Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.