Howard Hughes (HHC) vs. Brookfield Property Partners (BPY) Financial Analysis

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

Valuation and Earnings

This table compares Howard Hughes and Brookfield Property Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Howard Hughes $1.04 billion 5.22 $202.30 million $1.46 85.64
Brookfield Property Partners $5.19 billion 1.06 $660.00 million $0.24 89.71

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

Volatility and Risk

Howard Hughes has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Brookfield Property Partners has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Dividends

Brookfield Property Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.5%. Howard Hughes does not pay a dividend. Brookfield Property Partners pays out 491.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings for Howard Hughes and Brookfield Property Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Howard Hughes 0 1 1 0 2.50
Brookfield Property Partners 0 1 2 0 2.67

Howard Hughes presently has a consensus target price of $136.50, indicating a potential upside of 9.17%. Brookfield Property Partners has a consensus target price of $25.17, indicating a potential upside of 16.89%. Given Brookfield Property Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Brookfield Property Partners is more favorable than Howard Hughes.

Profitability

This table compares Howard Hughes and Brookfield Property Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Howard Hughes 5.83% 3.27% 1.40%
Brookfield Property Partners 11.89% 1.66% 0.70%

Institutional and Insider Ownership

85.3% of Howard Hughes shares are owned by institutional investors. Comparatively, 61.7% of Brookfield Property Partners shares are owned by institutional investors. 20.7% of Howard Hughes 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.

Howard Hughes Company Profile

The Howard Hughes Corporation is a developer of master planned communities and mixed use properties. The Company is engaged in the ownership, management and the redevelopment or repositioning of real estate assets, as well as other real estate opportunities in the form of entitled and unentitled land and other development rights, also called Strategic Developments. It operates through three segments: Master Planned Communities, Operating Assets and Strategic Developments. Its Master Planned Communities segment consists of the development and sale of residential land and the development of commercial land to hold, develop or sell. Its master planned communities include The Woodlands, Summerlin, Maryland, Bridgeland and The Woodlands Hills. As of December 31, 2016, its Operating Assets segment included 54 properties, investments and other assets. As of December 31, 2016, the Strategic Developments segment included 23 development projects.

Brookfield Property Partners Company Profile

Brookfield Property Partners L.P. is a diversified global real estate company. The Company owns, operates and develops a portfolio of office, retail, multifamily, industrial, hospitality, triple net lease, self-storage and student housing assets. Its partnership is Brookfield Asset Management Inc.’s public commercial property entity and the primary vehicle through which it invests in real estate on a global basis. It operates through four segments: Core Office, Core Retail, Opportunistic and Corporate. As of December 31, 2016, its Core Office segment consisted of interests in 142 office properties totaling 99 million square feet. As of December 31, 2016, its Core Retail segment consisted of interests in 127 regional malls and urban retail properties. As of December 31, 2016, its Opportunistic segment consisted of 107 office properties comprising approximately 29 million square feet of office space in the United States, United Kingdom, Brazil and Asia.

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