Comparing Hospitality Properties Trust (HPT) and MGM Growth Properties (MGP)
Hospitality Properties Trust (NASDAQ: HPT) and MGM Growth Properties (NYSE:MGP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.
Valuation and Earnings
This table compares Hospitality Properties Trust and MGM Growth Properties’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hospitality Properties Trust||$2.08 billion||2.14||$749.37 million||$1.18||22.94|
|MGM Growth Properties||$725.00 million||2.47||$613.53 million||$0.77||40.38|
Hospitality Properties Trust has higher revenue and earnings than MGM Growth Properties. Hospitality Properties Trust is trading at a lower price-to-earnings ratio than MGM Growth Properties, indicating that it is currently the more affordable of the two stocks.
Hospitality Properties Trust pays an annual dividend of $2.08 per share and has a dividend yield of 7.7%. MGM Growth Properties pays an annual dividend of $1.58 per share and has a dividend yield of 5.1%. Hospitality Properties Trust pays out 176.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGM Growth Properties pays out 205.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hospitality Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Hospitality Properties Trust and MGM Growth Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hospitality Properties Trust||10.22%||7.53%||3.16%|
|MGM Growth Properties||6.21%||0.81%||0.48%|
Insider & Institutional Ownership
76.4% of Hospitality Properties Trust shares are owned by institutional investors. 1.7% of Hospitality Properties Trust shares are owned by company insiders. Comparatively, 0.6% of MGM Growth Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of recent ratings and price targets for Hospitality Properties Trust and MGM Growth Properties, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hospitality Properties Trust||0||3||4||0||2.57|
|MGM Growth Properties||0||1||3||0||2.75|
Hospitality Properties Trust currently has a consensus price target of $32.33, indicating a potential upside of 19.44%. MGM Growth Properties has a consensus price target of $30.50, indicating a potential downside of 1.90%. Given Hospitality Properties Trust’s higher possible upside, equities research analysts clearly believe Hospitality Properties Trust is more favorable than MGM Growth Properties.
Volatility and Risk
Hospitality Properties Trust has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, MGM Growth Properties has a beta of -1.31, indicating that its share price is 231% less volatile than the S&P 500.
Hospitality Properties Trust beats MGM Growth Properties on 13 of the 16 factors compared between the two stocks.
Hospitality Properties Trust Company Profile
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.
MGM Growth Properties Company Profile
MGM Growth Properties LLC is a real estate investment trust engaged in the acquisition, ownership and leasing of destination entertainment and leisure resorts, whose amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. Its portfolio consists of approximately 10 destination resorts. It has over six entertainment and gaming-related properties located on the Las Vegas Strip, including Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor and Excalibur, and The Park, a dining and entertainment complex located between New York-New York and Monte Carlo. Outside of Las Vegas, it owns over four casino resort properties, including MGM Grand Detroit in Detroit, Michigan, Borgata Hotel Casino & Spa in Atlantic City, New Jersey, and Beau Rivage and Gold Strike Tunica, both of which are located in Mississippi. It operates approximately 27,330 hotel rooms, over 200 restaurants, approximately 100 retail outlets and over 20 entertainment venues.
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