Highlands REIT (OTCMKTS:HHDS – Get Free Report) and Broadstone Net Lease (NYSE:BNL – Get Free Report) are both real estate companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.
Volatility & Risk
Highlands REIT has a beta of 21.58, indicating that its share price is 2,058% more volatile than the S&P 500. Comparatively, Broadstone Net Lease has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.
Profitability
This table compares Highlands REIT and Broadstone Net Lease’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Highlands REIT | -31.82% | -6.18% | -3.61% |
| Broadstone Net Lease | 30.61% | 4.83% | 2.54% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Highlands REIT | 0 | 0 | 0 | 0 | 0.00 |
| Broadstone Net Lease | 0 | 4 | 7 | 0 | 2.64 |
Broadstone Net Lease has a consensus target price of $22.78, indicating a potential upside of 7.80%. Given Broadstone Net Lease’s stronger consensus rating and higher probable upside, analysts plainly believe Broadstone Net Lease is more favorable than Highlands REIT.
Valuation and Earnings
This table compares Highlands REIT and Broadstone Net Lease”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Highlands REIT | $37.41 million | 1.89 | -$11.10 million | ($0.01) | -9.85 |
| Broadstone Net Lease | $454.14 million | 8.93 | $96.50 million | $0.76 | 27.80 |
Broadstone Net Lease has higher revenue and earnings than Highlands REIT. Highlands REIT is trading at a lower price-to-earnings ratio than Broadstone Net Lease, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
0.0% of Highlands REIT shares are held by institutional investors. Comparatively, 89.1% of Broadstone Net Lease shares are held by institutional investors. 2.3% of Highlands REIT shares are held by company insiders. Comparatively, 1.0% of Broadstone Net Lease shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Summary
Broadstone Net Lease beats Highlands REIT on 12 of the 14 factors compared between the two stocks.
About Highlands REIT
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.
About Broadstone Net Lease
Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.
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