Comparing Highwoods Properties (NYSE:HIW) and COPT Defense Properties (NYSE:CDP)

Highwoods Properties (NYSE:HIW) and COPT Defense Properties (NYSE:CDP) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Institutional & Insider Ownership

96.3% of Highwoods Properties shares are held by institutional investors. 1.6% of Highwoods Properties shares are held by company insiders. Comparatively, 1.1% of COPT Defense Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Highwoods Properties has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, COPT Defense Properties has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Highwoods Properties and COPT Defense Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highwoods Properties	1	3	1	0	2.00
COPT Defense Properties	0	3	4	0	2.57

Highwoods Properties presently has a consensus target price of $31.20, suggesting a potential downside of 1.45%. COPT Defense Properties has a consensus target price of $30.86, suggesting a potential upside of 3.17%. Given COPT Defense Properties’ stronger consensus rating and higher possible upside, analysts clearly believe COPT Defense Properties is more favorable than Highwoods Properties.

Profitability

This table compares Highwoods Properties and COPT Defense Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highwoods Properties	17.40%	6.05%	2.40%
COPT Defense Properties	18.34%	8.99%	3.25%

Dividends

Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.3%. COPT Defense Properties pays an annual dividend of $1.18 per share and has a dividend yield of 3.9%. Highwoods Properties pays out 149.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. COPT Defense Properties pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Highwoods Properties and COPT Defense Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highwoods Properties	$834.00 million	4.02	$148.71 million	$1.34	23.63
COPT Defense Properties	$684.98 million	4.92	-$73.47 million	$1.22	24.52

Highwoods Properties has higher revenue and earnings than COPT Defense Properties. Highwoods Properties is trading at a lower price-to-earnings ratio than COPT Defense Properties, indicating that it is currently the more affordable of the two stocks.

Summary

COPT Defense Properties beats Highwoods Properties on 9 of the 16 factors compared between the two stocks.

About Highwoods Properties

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (REIT) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Highwoods is in the work-placemaking business. We believe that by creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stakeholders.

About COPT Defense Properties

COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (USG) defense installations and missions (referred to as its Defense/IT Portfolio). The Company's tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of December 31, 2023, the Company's Defense/IT Portfolio of 190 properties, including 24 owned through unconsolidated joint ventures, encompassed 21.7 million square feet and was 97.2% leased.