Critical Review: Hudson Pacific Properties (NYSE:HPP) vs. JBG SMITH Properties (NYSE:JBGS)

Hudson Pacific Properties (NYSE:HPP) and JBG SMITH Properties (NYSE:JBGS) are both small-cap real estate companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Hudson Pacific Properties and JBG SMITH Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hudson Pacific Properties	-70.04%	-20.76%	-7.73%
JBG SMITH Properties	-29.89%	-13.31%	-3.49%

Insider and Institutional Ownership

97.6% of Hudson Pacific Properties shares are owned by institutional investors. Comparatively, 98.5% of JBG SMITH Properties shares are owned by institutional investors. 2.5% of Hudson Pacific Properties shares are owned by insiders. Comparatively, 11.9% of JBG SMITH Properties shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Hudson Pacific Properties and JBG SMITH Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hudson Pacific Properties	3	6	4	0	2.08
JBG SMITH Properties	3	0	0	0	1.00

Hudson Pacific Properties presently has a consensus target price of $15.82, suggesting a potential upside of 37.84%. JBG SMITH Properties has a consensus target price of $14.67, suggesting a potential upside of 38.78%. Given JBG SMITH Properties’ higher probable upside, analysts plainly believe JBG SMITH Properties is more favorable than Hudson Pacific Properties.

Earnings and Valuation

This table compares Hudson Pacific Properties and JBG SMITH Properties”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hudson Pacific Properties	$831.10 million	0.75	-$561.69 million	($8.85)	-1.30
JBG SMITH Properties	$508.41 million	1.22	-$139.06 million	($2.61)	-4.05

JBG SMITH Properties has lower revenue, but higher earnings than Hudson Pacific Properties. JBG SMITH Properties is trading at a lower price-to-earnings ratio than Hudson Pacific Properties, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Hudson Pacific Properties has a beta of 1.96, meaning that its share price is 96% more volatile than the S&P 500. Comparatively, JBG SMITH Properties has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Summary

JBG SMITH Properties beats Hudson Pacific Properties on 9 of the 14 factors compared between the two stocks.

About Hudson Pacific Properties

Hudson Pacific Properties (NYSE: HPP) is a real estate investment trust serving dynamic tech and media tenants in global epicenters for these synergistic, converging and secular growth industries. Hudson Pacific's unique and high-barrier tech and media focus leverages a full-service, end-to-end value creation platform forged through deep strategic relationships and niche expertise across identifying, acquiring, transforming and developing properties into world-class amenitized, collaborative and sustainable office and studio space.

About JBG SMITH Properties

JBG SMITH Properties is a real estate investment trust, which engages in owning, operating, investing in, and developing a portfolio of mixed-use properties. It operates through the following segments: Multifamily, Commercial, and Other. The Multifamily segment refers to the commercial buildings with public areas, retail spaces, and walkable streets. The Commercial segment rents to federal government tenants. The Other segment relates to development assets, corporate entities, land assets for which are the ground lessor and the elimination of inter-segment activity. The company was founded on October 27, 2016, and is headquartered in Bethesda, MD.