Sunstone Hotel Investors (NYSE: SHO) and Gaming and Leisure Properties (NASDAQ:GLPI) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.

Earnings & Valuation

This table compares Sunstone Hotel Investors and Gaming and Leisure Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sunstone Hotel Investors $1.19 billion 3.04 $344.05 million $0.78 20.59
Gaming and Leisure Properties N/A N/A N/A $1.78 20.61

Sunstone Hotel Investors has higher revenue and earnings than Gaming and Leisure Properties. Sunstone Hotel Investors is trading at a lower price-to-earnings ratio than Gaming and Leisure Properties, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Sunstone Hotel Investors and Gaming and Leisure Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunstone Hotel Investors 2 5 2 0 2.00
Gaming and Leisure Properties 1 3 3 0 2.29

Sunstone Hotel Investors presently has a consensus target price of $16.13, indicating a potential upside of 0.40%. Gaming and Leisure Properties has a consensus target price of $38.80, indicating a potential upside of 5.78%. Given Gaming and Leisure Properties’ stronger consensus rating and higher probable upside, analysts plainly believe Gaming and Leisure Properties is more favorable than Sunstone Hotel Investors.

Profitability

This table compares Sunstone Hotel Investors and Gaming and Leisure Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunstone Hotel Investors 15.41% 7.70% 4.91%
Gaming and Leisure Properties 38.99% 17.14% 5.71%

Risk and Volatility

Sunstone Hotel Investors has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Gaming and Leisure Properties has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Insider and Institutional Ownership

89.3% of Gaming and Leisure Properties shares are held by institutional investors. 0.8% of Sunstone Hotel Investors shares are held by company insiders. Comparatively, 5.9% of Gaming and Leisure Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Sunstone Hotel Investors pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Gaming and Leisure Properties pays an annual dividend of $2.52 per share and has a dividend yield of 6.9%. Sunstone Hotel Investors pays out 25.6% of its earnings in the form of a dividend. Gaming and Leisure Properties pays out 141.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Gaming and Leisure Properties beats Sunstone Hotel Investors on 10 of the 14 factors compared between the two stocks.

About Sunstone Hotel Investors

Sunstone Hotel Investors, Inc. operates as a self-managed and self-administered real estate investment trust. The Company’s primary business is to acquire, own, asset manage and renovate primarily urban and resort upper upscale hotels in the United States. It operates through hotel ownership segment. It owns primarily urban and resort upper upscale hotels in the United States. The Company‚Äôs hotels are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt. As of July 26, 2017 the Company has interest in 27 hotels, including 13,202 rooms. The Company’s hotels are located in gateway markets, such as Boston, New York, Washington, District of Columbia (DC)/Baltimore, Chicago, Orlando, New Orleans, San Francisco, Los Angeles, Orange County and San Diego.

About Gaming and Leisure Properties

Gaming and Leisure Properties, Inc. (GLPI) is a self-administered and self-managed Pennsylvania real estate investment trust (REIT). The Company is engaged in the business of acquiring, financing and owning real estate property to be leased to gaming operators in triple net lease arrangements. Its segments include GLP Capital, L.P. (GLP Capital), through which the Company owns all of its real estate assets, and the TRS Properties, which consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. The GLP Capital segment consists of the leased real property. As of December 31, 2016, the Company had 34 rental properties, consisting of the real property associated with 18 gaming and related facilities operated by Penn National Gaming, Inc. (Penn), the real property associated with 15 gaming and related facilities operated by Pinnacle Entertainment, Inc. (Pinnacle), and the real property associated with the Casino Queen in East St. Louis, Illinois.

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