Kilroy Realty (NYSE:KRC) versus Highlands REIT (OTCMKTS:HHDS) Critical Contrast

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Kilroy Realty and Highlands REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kilroy Realty	2	10	2	1	2.13
Highlands REIT	0	0	0	0	0.00

Kilroy Realty currently has a consensus price target of $37.69, suggesting a potential upside of 8.98%. Given Kilroy Realty’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Kilroy Realty is more favorable than Highlands REIT.

Volatility & Risk

Kilroy Realty has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Highlands REIT has a beta of 22.15, meaning that its share price is 2,115% more volatile than the S&P 500.

Insider and Institutional Ownership

94.2% of Kilroy Realty shares are owned by institutional investors. Comparatively, 0.0% of Highlands REIT shares are owned by institutional investors. 0.8% of Kilroy Realty shares are owned by insiders. Comparatively, 2.3% of Highlands REIT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kilroy Realty	19.59%	3.89%	2.00%
Highlands REIT	-30.49%	-5.91%	-3.53%

Earnings & Valuation

This table compares Kilroy Realty and Highlands REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kilroy Realty	$1.11 billion	3.61	$276.12 million	$1.82	19.00
Highlands REIT	$37.41 million	0.31	-$11.10 million	($0.01)	-1.63

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

Summary

Kilroy Realty beats Highlands REIT on 13 of the 15 factors compared between the two stocks.

About Kilroy Realty

Kilroy Realty Corporation (NYSE: KRC, the company, Kilroy) is a leading U.S. landlord and developer, with operations in San Diego, Greater Los Angeles, the San Francisco Bay Area, Greater Seattle and Austin. The company has earned global recognition for sustainability, building operations, innovation and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the company's approach to modern business environments helps drive creativity and productivity for some of the world's leading technology, entertainment, life science and business services companies. The company is a publicly traded real estate investment trust (REIT) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office, life science and mixed-use projects. As of December 31, 2023, Kilroy's stabilized portfolio totaled approximately 17.0 million square feet of primarily office and life science space that was 85.0% occupied and 86.4% leased. The company also had approximately 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 92.5%. In addition, the company had two in-process life science redevelopment projects totaling approximately 100,000 square feet with total estimated redevelopment costs of $80.0 million and one approximately 875,000 square foot in-process development project with a total estimated investment of $1.0 billion.

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.