Armada Hoffler Properties (NYSE:AHH) and Five Point (NYSE:FPH) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Institutional and Insider Ownership

84.9% of Armada Hoffler Properties shares are owned by institutional investors. Comparatively, 34.7% of Five Point shares are owned by institutional investors. 13.3% of Armada Hoffler Properties shares are owned by insiders. Comparatively, 4.6% of Five Point shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Armada Hoffler Properties and Five Point’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Armada Hoffler Properties 12.78% 5.46% 1.83%
Five Point -25.69% -2.68% -1.72%

Analyst Ratings

This is a breakdown of current recommendations for Armada Hoffler Properties and Five Point, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armada Hoffler Properties 0 0 1 0 3.00
Five Point 0 1 3 0 2.75

Five Point has a consensus price target of $10.00, suggesting a potential upside of 23.30%. Given Five Point’s higher possible upside, analysts plainly believe Five Point is more favorable than Armada Hoffler Properties.

Risk and Volatility

Armada Hoffler Properties has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Five Point has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Earnings and Valuation

This table compares Armada Hoffler Properties and Five Point’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Armada Hoffler Properties $193.32 million 5.26 $17.20 million $1.03 17.81
Five Point $48.99 million 24.50 -$34.71 million ($0.36) -22.53

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

Summary

Armada Hoffler Properties beats Five Point on 10 of the 14 factors compared between the two stocks.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. (NYSE: AHH) is a vertically-integrated, self-managed real estate investment trust ("REIT") with four decades of experience developing, building, acquiring, and managing high-quality, institutional-grade office, retail, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to developing and building properties for its own account, the Company also provides development and general contracting construction services to third-party clients. Founded in 1979 by Daniel A. Hoffler, the Company has elected to be taxed as a REIT for U.S. federal income tax purposes.

About Five Point

Five Point Holdings, LLC, through its subsidiary, Five Point Operating Company, LP, plans, develops, and owns mixed-use communities in California, the United States. The company operates through four segments: Newhall, San Francisco, Great Park, and Commercial. It sells residential and commercial land sites to homebuilders, commercial developers, and commercial buyers; operates properties; and provides development management services. The company was formerly known as Newhall Holding Company, LLC and changed its name to Five Point Holdings, LLC in May 2016. Five Point Holdings, LLC was founded in 2009 and is based in Irvine, California.

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