Host Hotels & Resorts (NYSE: HST) and Chatham Lodging Trust (REIT) (NYSE:CLDT) are both hospitality reits companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Risk and Volatility

Host Hotels & Resorts has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Chatham Lodging Trust (REIT) has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Host Hotels & Resorts and Chatham Lodging Trust (REIT), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Host Hotels & Resorts 1 8 6 0 2.33
Chatham Lodging Trust (REIT) 0 6 1 0 2.14

Host Hotels & Resorts presently has a consensus price target of $19.50, suggesting a potential downside of 2.65%. Chatham Lodging Trust (REIT) has a consensus price target of $20.50, suggesting a potential downside of 10.17%. Given Host Hotels & Resorts’ stronger consensus rating and higher probable upside, equities analysts plainly believe Host Hotels & Resorts is more favorable than Chatham Lodging Trust (REIT).

Dividends

Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. Chatham Lodging Trust (REIT) pays an annual dividend of $1.32 per share and has a dividend yield of 5.8%. Host Hotels & Resorts pays out 98.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust (REIT) pays out 197.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts has increased its dividend for 2 consecutive years and Chatham Lodging Trust (REIT) has increased its dividend for 6 consecutive years. Chatham Lodging Trust (REIT) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Host Hotels & Resorts and Chatham Lodging Trust (REIT)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Host Hotels & Resorts 11.11% 8.44% 5.11%
Chatham Lodging Trust (REIT) 9.03% 3.90% 2.04%

Institutional and Insider Ownership

76.7% of Chatham Lodging Trust (REIT) shares are owned by institutional investors. 1.7% of Host Hotels & Resorts shares are owned by insiders. Comparatively, 3.6% of Chatham Lodging Trust (REIT) shares are owned by 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.

Valuation and Earnings

This table compares Host Hotels & Resorts and Chatham Lodging Trust (REIT)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Host Hotels & Resorts $5.43 billion 2.73 $762.00 million $0.81 24.73
Chatham Lodging Trust (REIT) $293.82 million 3.52 $31.48 million $0.67 34.06

Host Hotels & Resorts has higher revenue and earnings than Chatham Lodging Trust (REIT). Host Hotels & Resorts is trading at a lower price-to-earnings ratio than Chatham Lodging Trust (REIT), indicating that it is currently the more affordable of the two stocks.

Summary

Host Hotels & Resorts beats Chatham Lodging Trust (REIT) on 12 of the 17 factors compared between the two stocks.

Host Hotels & Resorts Company Profile

Host Hotels & Resorts, Inc. (Host Inc.) operates as a self-managed and self-administered real estate investment trust (REIT). The Company operates through hotel ownership segment. The Company operates through hotel ownership segment. The Company owned properties and conducted operations through Host Hotels & Resorts, L.P. (Host L.P.), of which Host Inc. was the general partner and of which it held approximately 99% of the partnership interests (OP units), as of December 31, 2016. As of February 20, 2017, its lodging portfolio consisted of 96 primarily luxury and upper-upscale hotels containing approximately 53,500 rooms, with the majority located in the United States, and with seven of the properties located outside of the United States in Australia, Brazil, Canada and Mexico. In addition, it owns non-controlling interests in two international joint ventures: approximately a 33% interest in a joint venture in Europe, and a 9% indirect interest, through joint ventures in India.

Chatham Lodging Trust (REIT) Company Profile

Chatham Lodging Trust is a real estate investment trust. The Company invests primarily in upscale extended-stay and premium-branded select-service hotels. All of the Company’s assets are held by, and all of its operations are conducted through Chatham Lodging, L.P. (the Operating Partnership). As of December 31, 2016, the Company owned 38 hotels with an aggregate of 5,712 rooms located in 15 states and the District of Columbia. As of December 31, 2016, the Company’s hotels included upscale extended-stay hotels that operate under the Residence Inn by Marriott brand (15 hotels) and Homewood Suites by Hilton brand (nine hotels), as well as premium-branded select-service hotels that operate under the Courtyard by Marriott brand (four hotels), the Hampton Inn or Hampton Inn and Suites by Hilton brand (three hotels), the Hilton Garden Inn by Hilton brand (three hotels), the SpringHill Suites by Marriott brand (two hotels) and the Hyatt Place brand (two hotels).

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