Critical Review: Highlands REIT (HHDS) versus Its Competitors

Highlands REIT (OTCMKTS:HHDS) is one of 282 public companies in the “Real estate investment trusts” industry, but how does it contrast to its rivals? We will compare Highlands REIT to similar businesses based on the strength of its institutional ownership, earnings, analyst recommendations, valuation, dividends, profitability and risk.

Volatility and Risk

Highlands REIT has a beta of 26.82, suggesting that its stock price is 2,582% more volatile than the S&P 500. Comparatively, Highlands REIT’s rivals have a beta of 1.23, suggesting that their average stock price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Highlands REIT and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highlands REIT	0	0	0	0	N/A
Highlands REIT Competitors	3596	13197	13444	332	2.34

As a group, “Real estate investment trusts” companies have a potential upside of 22.84%. Given Highlands REIT’s rivals higher possible upside, analysts clearly believe Highlands REIT has less favorable growth aspects than its rivals.

Valuation & Earnings

This table compares Highlands REIT and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Highlands REIT	$30.98 million	-$10.30 million	-9.88
Highlands REIT Competitors	$1.00 billion	$121.46 million	26.23

Highlands REIT’s rivals have higher revenue and earnings than Highlands REIT. Highlands REIT is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Highlands REIT and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highlands REIT	-33.24%	-4.51%	-3.04%
Highlands REIT Competitors	-1.76%	-3.15%	1.11%

Institutional and Insider Ownership

0.0% of Highlands REIT shares are owned by institutional investors. Comparatively, 69.0% of shares of all “Real estate investment trusts” companies are owned by institutional investors. 3.7% of Highlands REIT shares are owned by company insiders. Comparatively, 6.7% of shares of all “Real estate investment trusts” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Highlands REIT rivals beat Highlands REIT on 9 of the 10 factors compared.

Highlands REIT Company Profile

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.