Sunstone Hotel Investors (NYSE: SHO) and RLJ Lodging Trust (NYSE:RLJ) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.
Earnings and Valuation
This table compares Sunstone Hotel Investors and RLJ Lodging Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sunstone Hotel Investors||$1.19 billion||2.99||$134.19 million||$0.67||23.58|
|RLJ Lodging Trust||$1.16 billion||3.27||$200.35 million||$1.13||19.17|
Insider & Institutional Ownership
95.2% of RLJ Lodging Trust shares are held by institutional investors. 0.8% of Sunstone Hotel Investors shares are held by company insiders. Comparatively, 2.3% of RLJ Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Sunstone Hotel Investors and RLJ Lodging Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sunstone Hotel Investors||13.78%||6.20%||3.98%|
|RLJ Lodging Trust||12.30%||5.80%||3.04%|
Sunstone Hotel Investors pays an annual dividend of $2.32 per share and has a dividend yield of 14.7%. RLJ Lodging Trust pays an annual dividend of $1.32 per share and has a dividend yield of 6.1%. Sunstone Hotel Investors pays out 346.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust pays out 116.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunstone Hotel Investors has raised its dividend for 7 consecutive years. Sunstone Hotel Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Sunstone Hotel Investors has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, RLJ Lodging Trust has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Sunstone Hotel Investors and RLJ Lodging Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sunstone Hotel Investors||3||8||2||0||1.92|
|RLJ Lodging Trust||1||5||5||0||2.36|
Sunstone Hotel Investors currently has a consensus price target of $16.06, indicating a potential upside of 1.62%. RLJ Lodging Trust has a consensus price target of $23.45, indicating a potential upside of 8.29%. Given RLJ Lodging Trust’s stronger consensus rating and higher possible upside, analysts clearly believe RLJ Lodging Trust is more favorable than Sunstone Hotel Investors.
RLJ Lodging Trust beats Sunstone Hotel Investors on 10 of the 17 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 (REIT). The Company’s primary business is to acquire, own, asset manage and renovate primarily urban and resort upper upscale hotels in the United States. The Company operates through hotel ownership segment. The Company owns primarily urban and resort upper upscale hotels in the United States. The Company’s hotels are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt. As of January 10, 2018, the Company has interest in 25 hotels, including 12,450 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 RLJ Lodging Trust
RLJ Lodging Trust is a self-administered real estate investment trust. The Company is engaged in the acquisition of focused-service and compact full-service hotels. As of December 31, 2016, the Company owned 122 hotels with approximately 20,100 rooms, located in 21 states and the District of Columbia, and an interest in one mortgage loan secured by a hotel. Its hotels’ brand affiliations include Residence Inn, Courtyard, SpringHill Suites, Fairfield Inn & Suites, Marriott, Renaissance, Hilton Garden Inn, Hampton Inn/Hampton Inn & Suites, Embassy Suites, DoubleTree, Homewood Suites, Hilton, Hyatt House, Hyatt Place and Hyatt/Hyatt Centric. Its operating partnership is RLJ Lodging Trust, L.P. Its properties include Courtyard San Francisco, Courtyard Boulder Longmont, Residence Inn Longmont Boulder, DoubleTree Grand Key Resort, Courtyard Atlanta Buckhead, Courtyard Chicago Southeast Hammond, Courtyard Louisville Northeast, DoubleTree Hotel Columbia and Residence Inn Detroit Novi.
Receive News & Ratings for Sunstone Hotel Investors Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Sunstone Hotel Investors and related companies with MarketBeat.com's FREE daily email newsletter.