Critical Contrast: Arbor Realty Trust (NYSE:ABR) & Howard Hughes (NYSE:HHH)

Howard Hughes (NYSE:HHH) and Arbor Realty Trust (NYSE:ABR) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Profitability

This table compares Howard Hughes and Arbor Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Howard Hughes	6.57%	3.38%	1.03%
Arbor Realty Trust	23.99%	14.94%	2.61%

Valuation and Earnings

This table compares Howard Hughes and Arbor Realty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Howard Hughes	$1.02 billion	4.20	-$550.95 million	$1.51	56.83
Arbor Realty Trust	$1.33 billion	1.98	$371.43 million	$1.35	10.37

Arbor Realty Trust has higher revenue and earnings than Howard Hughes. Arbor Realty Trust is trading at a lower price-to-earnings ratio than Howard Hughes, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

93.8% of Howard Hughes shares are held by institutional investors. Comparatively, 57.3% of Arbor Realty Trust shares are held by institutional investors. 33.0% of Howard Hughes shares are held by company insiders. Comparatively, 3.7% of Arbor Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Howard Hughes and Arbor Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Howard Hughes	0	0	2	0	3.00
Arbor Realty Trust	2	2	2	0	2.00

Howard Hughes currently has a consensus price target of $82.00, indicating a potential downside of 4.45%. Arbor Realty Trust has a consensus price target of $14.25, indicating a potential upside of 1.79%. Given Arbor Realty Trust’s higher probable upside, analysts plainly believe Arbor Realty Trust is more favorable than Howard Hughes.

Risk and Volatility

Howard Hughes has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500. Comparatively, Arbor Realty Trust has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500.

Summary

Arbor Realty Trust beats Howard Hughes on 7 of the 13 factors compared between the two stocks.

About Howard Hughes

Howard Hughes Holdings Inc., together with its subsidiaries, operates as a real estate development company in the United States. It operates in four segments: Operating Assets; Master Planned Communities (MPCs); Seaport; and Strategic Developments. The Operating Assets segment consists of developed or acquired retail, office, and multi-family properties along with other retail investments. Its MPCs segment develops, sells, and leases residential and commercial land designated for long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona. The Seaport segment is involved in the landlord operations, managed businesses, and events and sponsorships services of its restaurant, retail, and entertain properties in Pier 17, New York City; Historic Area/Uplands; and Tin Building, as well as in 250 Water Street and in the Jean-Georges restaurants. The Strategic Development segment develops and redevelops residential condominiums and commercial properties. It serves homebuilders. Howard Hughes Holdings Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.

About Arbor Realty Trust

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.