Highlands REIT (OTCMKTS:HHDS) and Apple Hospitality REIT (NYSE:APLE) Critical Review

Highlands REIT (OTCMKTS:HHDS) and Apple Hospitality REIT (NYSE:APLE) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Insider & Institutional Ownership

0.0% of Highlands REIT shares are held by institutional investors. Comparatively, 89.7% of Apple Hospitality REIT shares are held by institutional investors. 3.7% of Highlands REIT shares are held by insiders. Comparatively, 6.8% of Apple Hospitality REIT shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Highlands REIT and Apple Hospitality REIT”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highlands REIT	$30.98 million	0.47	-$10.30 million	N/A	N/A
Apple Hospitality REIT	$1.41 billion	2.74	$177.49 million	$0.85	18.95

Apple Hospitality REIT has higher revenue and earnings than Highlands REIT.

Profitability

This table compares Highlands REIT and Apple Hospitality REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highlands REIT	-11.68%	-1.98%	-1.19%
Apple Hospitality REIT	14.53%	6.17%	4.09%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Highlands REIT and Apple Hospitality REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highlands REIT	0	0	0	0	0.00
Apple Hospitality REIT	0	3	1	0	2.25

Apple Hospitality REIT has a consensus target price of $16.50, indicating a potential upside of 2.42%. Given Apple Hospitality REIT’s stronger consensus rating and higher probable upside, analysts clearly believe Apple Hospitality REIT is more favorable than Highlands REIT.

Risk and Volatility

Highlands REIT has a beta of 18.41, suggesting that its stock price is 1,741% more volatile than the S&P 500. Comparatively, Apple Hospitality REIT has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Summary

Apple Hospitality REIT beats Highlands REIT on 11 of the 12 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 Apple Hospitality REIT

Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust (REIT) that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States. Apple Hospitality's portfolio consists of 223 hotels with more than 29,400 guest rooms located in 87 markets throughout 37 states as well as one property leased to third parties. Concentrated with industry-leading brands, the Company's hotel portfolio consists of 99 Marriott-branded hotels, 119 Hilton-branded hotels and five Hyatt-branded hotels.