Colony NorthStar (CLNS) vs. Hannon Armstrong Sustnbl Infrstr Cap (HASI) Critical Comparison

Colony NorthStar (NYSE: CLNS) and Hannon Armstrong Sustnbl Infrstr Cap (NYSE:HASI) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

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This table compares Colony NorthStar and Hannon Armstrong Sustnbl Infrstr Cap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Colony NorthStar -7.08% -1.86% -0.83%
Hannon Armstrong Sustnbl Infrstr Cap 29.23% 8.84% 2.58%

Dividends

Colony NorthStar pays an annual dividend of $1.08 per share and has a dividend yield of 18.2%. Hannon Armstrong Sustnbl Infrstr Cap pays an annual dividend of $1.32 per share and has a dividend yield of 7.0%. Colony NorthStar pays out -171.4% of its earnings in the form of a dividend. Hannon Armstrong Sustnbl Infrstr Cap pays out 227.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hannon Armstrong Sustnbl Infrstr Cap has raised its dividend for 4 consecutive years. Colony NorthStar is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

82.0% of Colony NorthStar shares are held by institutional investors. Comparatively, 72.7% of Hannon Armstrong Sustnbl Infrstr Cap shares are held by institutional investors. 8.0% of Colony NorthStar shares are held by company insiders. Comparatively, 5.4% of Hannon Armstrong Sustnbl Infrstr Cap shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Colony NorthStar and Hannon Armstrong Sustnbl Infrstr Cap, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Colony NorthStar 0 1 5 0 2.83
Hannon Armstrong Sustnbl Infrstr Cap 0 1 6 0 2.86

Colony NorthStar currently has a consensus target price of $12.00, indicating a potential upside of 102.02%. Hannon Armstrong Sustnbl Infrstr Cap has a consensus target price of $27.00, indicating a potential upside of 42.33%. Given Colony NorthStar’s higher probable upside, research analysts plainly believe Colony NorthStar is more favorable than Hannon Armstrong Sustnbl Infrstr Cap.

Volatility & Risk

Colony NorthStar has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Hannon Armstrong Sustnbl Infrstr Cap has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Earnings and Valuation

This table compares Colony NorthStar and Hannon Armstrong Sustnbl Infrstr Cap’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Colony NorthStar $2.80 billion 1.15 -$197.89 million ($0.63) -9.43
Hannon Armstrong Sustnbl Infrstr Cap $105.57 million 9.59 $30.85 million $0.58 32.71

Hannon Armstrong Sustnbl Infrstr Cap has lower revenue, but higher earnings than Colony NorthStar. Colony NorthStar is trading at a lower price-to-earnings ratio than Hannon Armstrong Sustnbl Infrstr Cap, indicating that it is currently the more affordable of the two stocks.

Summary

Hannon Armstrong Sustnbl Infrstr Cap beats Colony NorthStar on 10 of the 17 factors compared between the two stocks.

About Colony NorthStar

Colony NorthStar, Inc. is a diversified equity real estate investment trust (REIT). The Company combines a portfolio of real assets across the world, which are managed with a global real estate investment manager. The Company has property holdings in the healthcare, industrial and hospitality sectors, opportunistic equity and debt investments, and an embedded institutional and retail investment management business. In addition, the Company owns NorthStar Securities, LLC, a captive broker-dealer platform which raises capital in the retail market. The Company acquires, develops and operates industrial properties in metropolitan markets throughout the United States with a focus on light industrial buildings. The Company provides investment management services and offers investment products while serving as a fiduciary to a set of institutional and individual investors.

About Hannon Armstrong Sustnbl Infrstr Cap

Hannon Armstrong Sustainable Infrastructure Capital, Inc. makes debt and equity investments in sustainable infrastructure, including energy efficiency and renewable energy. The Company focuses on providing preferred or senior level capital to sponsors and obligors for assets that generate long-term, recurring and predictable cash flows. The Company focuses its investment activities primarily on Energy Efficiency Projects, which include projects typically undertaken by energy service companies, which reduce a building’s or facility’s energy usage or cost by installing various building components, including heating, ventilation and air conditioning systems, lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems, and Renewable Energy Projects, which include projects that deploy cleaner energy sources, such as solar and wind to generate power production. It may also invest in other projects, such as water or communications infrastructure.

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