Critical Survey: Howard Hughes Corporation (The) (NYSE:HHC) versus Transcontinental Realty Investors (TCI)

Howard Hughes Corporation (The) (NYSE: HHC) and Transcontinental Realty Investors (NYSE:TCI) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

80.4% of Howard Hughes Corporation (The) shares are owned by institutional investors. Comparatively, 0.3% of Transcontinental Realty Investors shares are owned by institutional investors. 20.7% of Howard Hughes Corporation (The) shares are owned by insiders. Comparatively, 81.0% of Transcontinental Realty Investors shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Howard Hughes Corporation (The) and Transcontinental Realty Investors’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Howard Hughes Corporation (The) $1.06 billion 4.81 $295.39 million $1.41 83.65
Transcontinental Realty Investors $121.84 million 1.58 $44.57 million ($2.01) -10.99

Howard Hughes Corporation (The) has higher revenue and earnings than Transcontinental Realty Investors. Transcontinental Realty Investors is trading at a lower price-to-earnings ratio than Howard Hughes Corporation (The), indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Howard Hughes Corporation (The) has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500. Comparatively, Transcontinental Realty Investors has a beta of -0.17, indicating that its share price is 117% less volatile than the S&P 500.

Profitability

This table compares Howard Hughes Corporation (The) and Transcontinental Realty Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Howard Hughes Corporation (The) 5.69% 4.80% 1.98%
Transcontinental Realty Investors -13.64% -7.61% -1.38%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Howard Hughes Corporation (The) and Transcontinental Realty Investors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Howard Hughes Corporation (The) 0 1 2 0 2.67
Transcontinental Realty Investors 0 3 0 0 2.00

Howard Hughes Corporation (The) currently has a consensus target price of $144.33, indicating a potential upside of 22.38%. Transcontinental Realty Investors has a consensus target price of $20.33, indicating a potential downside of 7.91%. Given Howard Hughes Corporation (The)’s stronger consensus rating and higher possible upside, research analysts plainly believe Howard Hughes Corporation (The) is more favorable than Transcontinental Realty Investors.

Summary

Howard Hughes Corporation (The) beats Transcontinental Realty Investors on 12 of the 13 factors compared between the two stocks.

About Howard Hughes Corporation (The)

The Howard Hughes Corporation is a developer of master planned communities and mixed use properties. The Company is engaged in the ownership, management and the redevelopment or repositioning of real estate assets, as well as other real estate opportunities in the form of entitled and unentitled land and other development rights, also called Strategic Developments. It operates through three segments: Master Planned Communities, Operating Assets and Strategic Developments. Its Master Planned Communities segment consists of the development and sale of residential land and the development of commercial land to hold, develop or sell. Its master planned communities include The Woodlands, Summerlin, Maryland, Bridgeland and The Woodlands Hills. As of December 31, 2016, its Operating Assets segment included 54 properties, investments and other assets. As of December 31, 2016, the Strategic Developments segment included 23 development projects.

About Transcontinental Realty Investors

Transcontinental Realty Investors, Inc. is an externally advised and managed real estate investment company that owns a portfolio of income-producing properties and land held for development. The Company’s segments are Commercial Properties, Apartments, Land and Other. Its portfolio of income-producing properties includes residential apartment communities, office buildings and other commercial properties. It acquires land mainly in in-fill locations or suburban markets. The Company’s income-producing properties consist of approximately eight commercial properties, including five office buildings, two retail properties and an industrial warehouse, comprising in aggregate approximately 1.9 million square feet; a golf course comprising approximately 96.09 acres, and approximately 50 residential apartment communities comprising over 7,980 units, excluding apartments being developed. In addition, it owns approximately 3,660 acres of land held for development.

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