Reviewing Hospitality Properties Trust (NASDAQ:HPT) & Summit Hotel Properties (INN)
Hospitality Properties Trust (NASDAQ: HPT) and Summit Hotel Properties (NYSE:INN) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitabiliy, risk, valuation, earnings and analyst recommendations.
Hospitality Properties Trust pays an annual dividend of $2.08 per share and has a dividend yield of 7.2%. Summit Hotel Properties pays an annual dividend of $0.68 per share and has a dividend yield of 3.7%. Hospitality Properties Trust pays out 180.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Hotel Properties pays out 85.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Hotel Properties has raised its dividend for 3 consecutive years.
Institutional and Insider Ownership
77.8% of Hospitality Properties Trust shares are held by institutional investors. Comparatively, 87.2% of Summit Hotel Properties shares are held by institutional investors. 1.7% of Hospitality Properties Trust shares are held by company insiders. Comparatively, 1.9% of Summit Hotel Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Hospitality Properties Trust and Summit Hotel Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hospitality Properties Trust||10.10%||7.54%||3.13%|
|Summit Hotel Properties||19.50%||9.26%||5.42%|
Earnings & Valuation
This table compares Hospitality Properties Trust and Summit Hotel Properties’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hospitality Properties Trust||$2.06 billion||2.32||$736.56 million||$1.15||25.30|
|Summit Hotel Properties||$473.84 million||4.02||$153.65 million||$0.80||22.83|
Hospitality Properties Trust has higher revenue and earnings than Summit Hotel Properties. Summit Hotel Properties is trading at a lower price-to-earnings ratio than Hospitality Properties Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for Hospitality Properties Trust and Summit Hotel Properties, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hospitality Properties Trust||0||3||4||0||2.57|
|Summit Hotel Properties||0||0||7||0||3.00|
Hospitality Properties Trust currently has a consensus price target of $32.75, indicating a potential upside of 12.58%. Summit Hotel Properties has a consensus price target of $17.93, indicating a potential downside of 1.82%. Given Hospitality Properties Trust’s higher possible upside, analysts clearly believe Hospitality Properties Trust is more favorable than Summit Hotel Properties.
Risk & Volatility
Hospitality Properties Trust has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Summit Hotel Properties has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.
Summit Hotel Properties beats Hospitality Properties Trust on 12 of the 17 factors compared between the two stocks.
About Hospitality Properties Trust
Hospitality Properties Trust is a real estate investment trust. The Company’s segments include hotel investments, travel center investments and corporate. As of December 31, 2016, the Company owned 306 hotels with 46,583 rooms or suites, and 198 travel centers. As of December 31, 2016, the Company’s properties were located in 45 states in the United States, Canada and Puerto Rico. As of December 31, 2016, the Company’s hotels were operated as Courtyard by Marriott, Royal Sonesta, Sonesta Hotels & Resorts, Candlewood Suites, Residence Inn by Marriott, Sonesta ES Suites, Crowne Plaza Hotels & Resorts, Staybridge Suites, Hyatt Place, Wyndham Grand, Wyndham Hotels & Resorts, InterContinental Hotels & Resorts, Marriott Hotels and Resorts, the Clift Hotel, Radisson Hotels & Resorts, Kimpton Hotels & Restaurants, TownePlace Suites by Marriott, Hawthorn Suites, Country Inns & Suites by Carlson, Holiday Inn Hotels & Resorts, SpringHill Suites by Marriott, and Park Plaza Hotels & Resorts.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a real estate investment trust (REIT). The Company is focused primarily on owning premium-branded, select-service hotels in the Upscale segment of the United States lodging industry. The Company’s portfolio consists of 81 hotels with a total of 11,608 guestrooms located in 24 states. The Company’s hotels are located in markets, such as business and corporate headquarters, retail centers, airports and tourist attractions. The Company’s portfolio is located in urban and suburban markets. Based on total number of guestrooms, approximately 92% of the Company’s portfolio is positioned in over 50 metropolitan statistical areas (MSAs), and approximately 96% is located within over 100 MSAs. Based on total number of guestrooms, approximately 99% of the Company’s hotels operate under franchise brands owned by Marriott International, Inc., Hilton Worldwide, InterContinental Hotels Group, and an affiliate of Hyatt Hotels Corporation.
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