Hudson Pacific Properties, Inc. (NYSE: HPP)

Sector: Real Estate Industry: REIT - Office CIK: 0001482512
Market Cap 171.70 Mn
P/B 0.05
P/E -0.37
P/S 0.22
ROIC (Qtr) -1.45
Div Yield % 0.00
Rev 1y % (Qtr) -6.87
Total Debt (Qtr) 3.97 Bn
Debt/Equity (Qtr) 1.22
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About

Hudson Pacific Properties, Inc. (HPP) is a real estate investment trust (REIT) that operates in the technology and media industries, specializing in acquiring, repositioning, developing, and operating high-quality office and studio properties. HPP boasts a substantial portfolio, comprising over 14.7 million square feet of office space and 1.7 million square feet of studio space, making it a significant player in the West Coast technology and media markets. Hudson Pacific Properties' main business activities involve the acquisition, development,...

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Investment thesis

Bull case

  • Free cash flow of (20.97M) provides excellent 59.41x coverage of dividends (353000), indicating sustainable shareholder returns.
  • Strong tangible asset base of 7.64B provides 48.80x coverage of intangibles 156.53M, indicating robust asset quality.
  • Tangible assets of 7.64B provide robust 34.89x coverage of receivables 218.96M, showing strong asset quality.

Bear case

  • Operating cash flow of 61.84M barely covers its investment activities of (118.88M), with a coverage ratio of -0.52, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 61.84M provides thin coverage of dividend payments of (353000) with a -175.17 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 214.45M provide limited coverage of acquisition spending of (32.33M), which is -6.63x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 61.84M shows concerning coverage of stock compensation expenses of 33.17M, with a 1.86 ratio indicating potential earnings quality issues.
  • Operating cash flow of 61.84M provides minimal -162.72x coverage of tax expenses of (380000), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the REIT - Office
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BXP BXP, Inc. 9.52 Bn 10.44 3.12 17.35 Bn
2 ARE Alexandria Real Estate Equities, Inc. 9.27 Bn -6.45 3.06 12.40 Bn
3 VNO Vornado Realty Trust 5.56 Bn 6.60 3.07 7.89 Bn
4 KRC Kilroy Realty Corp 3.77 Bn 13.65 3.39 4.59 Bn
5 CDP Copt Defense Properties 3.33 Bn 46.00 5.75 2.49 Bn
6 SLG Sl Green Realty Corp 2.75 Bn -24.56 2.74 5.97 Bn
7 HIW Highwoods Properties, Inc. 2.49 Bn 15.83 3.09 3.55 Bn
8 CUZ Cousins Properties Inc 2.44 Bn 24.76 4.97 3.34 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.52 0.66
EV to Cash from Ops. EV/CFO 65.01 35.35
EV to Debt EV to Debt 1.01 1.60
EV to EBIT EV/EBIT -15.25 -177.85
EV to EBITDA EV/EBITDA 15.22 15.22
EV to Free Cash Flow [EV/FCF] EV/FCF -191.69 -21.54
EV to Market Cap EV to Market Cap 23.41 14.69
EV to Revenue EV/Rev 5.12 6.06
Price to Book Value [P/B] P/B 0.05 0.76
Price to Earnings [P/E] P/E -0.37 3.15
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -21.95 -2.81
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 86.83
Dividend per Basic Share Div per Share (Qtr) 0.00 1.13
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -31.14
Interest Coverage Int. cover (Qtr) -1.48 -0.15
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -118.40 -13.82
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 88.22 8.92
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -13.06
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -220.49 -81.02
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -18.09 -59.28
EBIT Growth (1y) % EBIT 1y % (Qtr) -231.38 -85.68
EBT Growth (1y) % EBT 1y % (Qtr) -66.33 -24.55
EPS Growth (1y) % EPS 1y % (Qtr) -16.78 393.08
FCF Growth (1y) % FCF 1y % (Qtr) -103.36 148.67
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.57 -2.47
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.10 0.13
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.24
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 1.22 1.46
Interest Cover Ratio Int Coverage (Qtr) -1.48 -0.15
Times Interest Earned Times Interest Earned (Qtr) -1.48 -0.15
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.70 29.81
EBIT Margin % EBIT Margin % (Qtr) -33.58 -4.47
EBT Margin % EBT Margin % (Qtr) -56.20 -25.12
Gross Margin % Gross Margin % (Qtr) 43.80 60.66
Net Profit Margin % Net Margin % (Qtr) -58.80 -26.43