Hersha Hospitality Trust (NYSE: HT) and Ashford Hospitality Trust (NYSE:AHT) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares Hersha Hospitality Trust and Ashford Hospitality Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hersha Hospitality Trust 22.77% 14.78% 6.13%
Ashford Hospitality Trust -5.43% -10.41% -1.64%

Volatility & Risk

Hersha Hospitality Trust has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Ashford Hospitality Trust has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.

Dividends

Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.1%. Ashford Hospitality Trust pays an annual dividend of $0.48 per share and has a dividend yield of 7.4%. Hersha Hospitality Trust pays out 48.7% of its earnings in the form of a dividend. Ashford Hospitality Trust pays out -35.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ashford Hospitality Trust has increased its dividend for 3 consecutive years. Ashford Hospitality Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

98.5% of Hersha Hospitality Trust shares are owned by institutional investors. Comparatively, 70.3% of Ashford Hospitality Trust shares are owned by institutional investors. 8.1% of Hersha Hospitality Trust shares are owned by company insiders. Comparatively, 18.2% of Ashford Hospitality Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Hersha Hospitality Trust and Ashford Hospitality Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hersha Hospitality Trust $471.75 million 1.63 $138.69 million $2.30 8.00
Ashford Hospitality Trust $1.45 billion 0.44 $394.52 million ($1.34) -4.84

Ashford Hospitality Trust has higher revenue and earnings than Hersha Hospitality Trust. Ashford Hospitality Trust is trading at a lower price-to-earnings ratio than Hersha Hospitality Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Hersha Hospitality Trust and Ashford Hospitality Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hersha Hospitality Trust 1 4 3 0 2.25
Ashford Hospitality Trust 0 3 3 0 2.50

Hersha Hospitality Trust presently has a consensus price target of $19.75, indicating a potential upside of 7.28%. Ashford Hospitality Trust has a consensus price target of $7.46, indicating a potential upside of 15.10%. Given Ashford Hospitality Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Ashford Hospitality Trust is more favorable than Hersha Hospitality Trust.

Summary

Ashford Hospitality Trust beats Hersha Hospitality Trust on 9 of the 16 factors compared between the two stocks.

About Hersha Hospitality Trust

Hersha Hospitality Trust is a self-advised real estate investment trust (REIT). The Company invests primarily in institutional grade hotels in urban gateway markets, including New York, Washington, District of Columbia, Boston, Philadelphia, South Florida and select markets on the West Coast. As of July 20, 2017, the Company’s hotels included 51 hotels totaling 7,804 rooms located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company’s property brands include Marriott International, Hilton Hotels, Hyatt Hotels, Intercontinental Hotel Group, Wyndham Hotels and Hersha’s Independent Hotel Collection.

About Ashford Hospitality Trust

Ashford Hospitality Trust, Inc. is an externally-advised real estate investment trust (REIT). The Company is focused on investing in the hospitality industry with a focus on full-service upscale and upper-upscale hotels in the United States. The Company owns its lodging investments and conducts its business through Ashford Hospitality Limited Partnership (Ashford Trust OP), its operating partnership. The Company’s portfolio consists of 121 properties with over 25000 rooms; 86 hotel condominium units at WorldQuest Resort in Orlando, Florida; a 96.6% ownership in Ashford Quantitative Alternatives (U.S.), LP (the AQUA U.S. Fund); a 29.7% ownership in Ashford Inc., and a 13.3% ownership in OpenKey.

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