Summit Hotel Properties (NYSE: INN) and Ashford Hospitality Prime (NYSE:AHP) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Valuation & Earnings

This table compares Summit Hotel Properties and Ashford Hospitality Prime’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit Hotel Properties $473.93 million 3.37 $107.80 million $0.82 18.67
Ashford Hospitality Prime $405.86 million 0.72 $19.31 million ($0.28) -32.78

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Summit Hotel Properties and Ashford Hospitality Prime, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Hotel Properties 1 1 7 0 2.67
Ashford Hospitality Prime 0 3 4 0 2.57

Summit Hotel Properties presently has a consensus price target of $17.19, suggesting a potential upside of 12.26%. Ashford Hospitality Prime has a consensus price target of $13.40, suggesting a potential upside of 45.97%. Given Ashford Hospitality Prime’s higher possible upside, analysts plainly believe Ashford Hospitality Prime is more favorable than Summit Hotel Properties.

Profitability

This table compares Summit Hotel Properties and Ashford Hospitality Prime’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Hotel Properties 20.21% 8.96% 5.28%
Ashford Hospitality Prime -0.36% -0.43% -0.10%

Insider & Institutional Ownership

95.7% of Summit Hotel Properties shares are held by institutional investors. Comparatively, 62.3% of Ashford Hospitality Prime shares are held by institutional investors. 1.7% of Summit Hotel Properties shares are held by insiders. Comparatively, 10.0% of Ashford Hospitality Prime shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Summit Hotel Properties has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Ashford Hospitality Prime has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Dividends

Summit Hotel Properties pays an annual dividend of $0.68 per share and has a dividend yield of 4.4%. Ashford Hospitality Prime pays an annual dividend of $0.64 per share and has a dividend yield of 7.0%. Summit Hotel Properties pays out 82.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ashford Hospitality Prime pays out -228.6% of its earnings in the form of a dividend. Summit Hotel Properties has increased its dividend for 2 consecutive years and Ashford Hospitality Prime has increased its dividend for 3 consecutive years. Ashford Hospitality Prime is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Summit Hotel Properties beats Ashford Hospitality Prime on 12 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.

Ashford Hospitality Prime Company Profile

Ashford Hospitality Prime, Inc. invests in high revenue per available room (RevPAR), luxury hotels and resorts. The Company conducts its business and owns all of its assets through its operating partnership, Ashford Hospitality Prime Limited Partnership (Ashford Prime OP). The Company operates in the direct hotel investment segment of the hotel lodging industry. As of February 24, 2017, it owned interests in 11 hotel properties in six states, the District of Columbia and St. Thomas, the United States Virgin Islands with 3,702 total rooms, or 3,467 net rooms, excluding those attributable to its joint venture partner. The hotel properties in its portfolio are mainly located in the Unites States urban markets. The Company owns nine of its hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated entity. All of the hotels in the Company’s portfolio are asset-managed by Ashford Hospitality Advisors LLC.

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