Head to Head Review: Retail Opportunity Investments (NASDAQ:ROIC) versus Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI)


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Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) and Retail Opportunity Investments (NASDAQ:ROIC) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Volatility and Risk

Hannon Armstrong Sustainable Infrastructure Capital has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500. Comparatively, Retail Opportunity Investments has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Profitability

This table compares Hannon Armstrong Sustainable Infrastructure Capital and Retail Opportunity Investments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hannon Armstrong Sustainable Infrastructure Capital 58.73% 9.07% 3.39%
Retail Opportunity Investments 11.68% 2.61% 1.12%

Analyst Ratings

This is a summary of current recommendations for Hannon Armstrong Sustainable Infrastructure Capital and Retail Opportunity Investments, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hannon Armstrong Sustainable Infrastructure Capital 0 2 6 0 2.75
Retail Opportunity Investments 1 4 5 0 2.40

Hannon Armstrong Sustainable Infrastructure Capital currently has a consensus target price of $56.50, suggesting a potential upside of 3.69%. Retail Opportunity Investments has a consensus target price of $13.61, suggesting a potential downside of 17.41%. Given Hannon Armstrong Sustainable Infrastructure Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Hannon Armstrong Sustainable Infrastructure Capital is more favorable than Retail Opportunity Investments.

Valuation and Earnings

This table compares Hannon Armstrong Sustainable Infrastructure Capital and Retail Opportunity Investments’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hannon Armstrong Sustainable Infrastructure Capital $141.58 million 30.28 $81.56 million $1.18 46.18
Retail Opportunity Investments $295.04 million 6.62 $48.84 million $1.10 14.98

Hannon Armstrong Sustainable Infrastructure Capital has higher earnings, but lower revenue than Retail Opportunity Investments. Retail Opportunity Investments is trading at a lower price-to-earnings ratio than Hannon Armstrong Sustainable Infrastructure Capital, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

77.7% of Hannon Armstrong Sustainable Infrastructure Capital shares are held by institutional investors. Comparatively, 91.0% of Retail Opportunity Investments shares are held by institutional investors. 3.4% of Hannon Armstrong Sustainable Infrastructure Capital shares are held by insiders. Comparatively, 2.5% of Retail Opportunity Investments shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Hannon Armstrong Sustainable Infrastructure Capital pays an annual dividend of $1.40 per share and has a dividend yield of 2.6%. Retail Opportunity Investments pays an annual dividend of $0.44 per share and has a dividend yield of 2.7%. Hannon Armstrong Sustainable Infrastructure Capital pays out 118.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Opportunity Investments pays out 40.0% of its earnings in the form of a dividend. Hannon Armstrong Sustainable Infrastructure Capital has increased its dividend for 2 consecutive years. Retail Opportunity Investments is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Hannon Armstrong Sustainable Infrastructure Capital beats Retail Opportunity Investments on 12 of the 17 factors compared between the two stocks.

Hannon Armstrong Sustainable Infrastructure Capital Company Profile

Hannon Armstrong Sustainable Infrastructure Capital, Inc. provides capital and services to the energy efficiency, renewable energy, and other sustainable infrastructure markets in the United States. The company's projects include energy efficiency projects that reduce a buildings or facilities energy usage or cost through the use of solar generation, including heating, ventilation, and air conditioning systems, as well as lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems. It also focuses in the areas of grid connected projects that deploy cleaner energy sources, such as solar and wind to generate power; and other sustainable infrastructure projects, including upgraded transmission or distribution systems, water and storm water infrastructures, and other projects. The company qualifies as a real estate investment trust for U.S. federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Hannon Armstrong Sustainable Infrastructure Capital, Inc. was founded in 1981 and is headquartered in Annapolis, Maryland.

Retail Opportunity Investments Company Profile

Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated, metropolitan markets across the West Coast. As of September 30, 2020, ROIC owned 88 shopping centers encompassing approximately 10.1 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services, S&P Global Ratings, and Fitch Ratings, Inc.

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