Summit Hotel Properties (NYSE: INN) and Chesapeake Lodging Trust (NYSE:CHSP) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Volatility & Risk

Summit Hotel Properties has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Chesapeake Lodging Trust has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Valuation & Earnings

This table compares Summit Hotel Properties and Chesapeake Lodging Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Summit Hotel Properties $475.70 million 3.26 $154.58 million $0.90 16.53
Chesapeake Lodging Trust $606.99 million 2.49 $175.85 million $0.97 26.37

Chesapeake Lodging Trust has higher revenue and earnings than Summit Hotel Properties. Summit Hotel Properties is trading at a lower price-to-earnings ratio than Chesapeake Lodging Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Summit Hotel Properties pays an annual dividend of $0.68 per share and has a dividend yield of 4.6%. Chesapeake Lodging Trust pays an annual dividend of $1.60 per share and has a dividend yield of 6.3%. Summit Hotel Properties pays out 75.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Lodging Trust pays out 164.9% 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 has raised its dividend for 3 consecutive years and Chesapeake Lodging Trust has raised its dividend for 5 consecutive years. Chesapeake Lodging Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

95.3% of Summit Hotel Properties shares are held by institutional investors. Comparatively, 98.5% of Chesapeake Lodging Trust shares are held by institutional investors. 1.7% of Summit Hotel Properties shares are held by insiders. Comparatively, 2.2% of Chesapeake Lodging Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Summit Hotel Properties and Chesapeake Lodging Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Hotel Properties 1 2 5 0 2.50
Chesapeake Lodging Trust 0 3 1 0 2.25

Summit Hotel Properties presently has a consensus target price of $17.50, suggesting a potential upside of 17.61%. Chesapeake Lodging Trust has a consensus target price of $24.50, suggesting a potential downside of 4.22%. Given Summit Hotel Properties’ stronger consensus rating and higher probable upside, equities analysts clearly believe Summit Hotel Properties is more favorable than Chesapeake Lodging Trust.

Profitability

This table compares Summit Hotel Properties and Chesapeake Lodging Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Hotel Properties 21.97% 9.89% 5.83%
Chesapeake Lodging Trust 10.77% 5.53% 3.19%

Summary

Summit Hotel Properties beats Chesapeake Lodging Trust on 9 of the 17 factors compared between the two stocks.

Summit Hotel Properties Company Profile

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 79 hotels with a total of 11,590 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.

Chesapeake Lodging Trust Company Profile

Chesapeake Lodging Trust is a real estate investment trust. The Company is focused on investments primarily in upper-upscale hotels in various business and convention markets and, on a selective basis, select-service hotels in urban settings or other locations in the United States. The Company operates through the hotel ownership segment. The Company conducts its operations primarily though Chesapeake Lodging, L.P., its operating partnership (the Operating Partnership). As of February 17, 2017, the Company owned 22 hotels. As of February 17, 2017, the Company’s portfolio included Hyatt Regency Boston; Hilton Checkers Los Angeles; Boston Marriott Newton; Le Meridien San Francisco; Hotel Indigo San Diego Gaslamp Quarter; Courtyard Washington Capitol Hill/Navy Yard; Hotel Adagio San Francisco, Autograph Collection; Denver Marriott City Center; Hyatt Herald Square New York, and Ace Hotel and Theater Downtown Los Angeles. As of February 17, 2017, the Company’s hotels had 6,694 rooms.

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