Hersha Hospitality Trust (NYSE: HT) and Chatham Lodging Trust (NYSE:CLDT) are both small-cap financials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.
This table compares Hersha Hospitality Trust and Chatham Lodging Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hersha Hospitality Trust||17.46%||9.47%||4.03%|
|Chatham Lodging Trust||9.86%||4.11%||2.21%|
This table compares Hersha Hospitality Trust and Chatham Lodging Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hersha Hospitality Trust||$498.24 million||1.41||$99.86 million||$1.66||10.61|
|Chatham Lodging Trust||$298.86 million||3.00||$29.47 million||$0.73||26.78|
Hersha Hospitality Trust has higher revenue and earnings than Chatham Lodging Trust. Hersha Hospitality Trust is trading at a lower price-to-earnings ratio than Chatham Lodging Trust, indicating that it is currently the more affordable of the two stocks.
Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.4%. Chatham Lodging Trust pays an annual dividend of $1.32 per share and has a dividend yield of 6.8%. Hersha Hospitality Trust pays out 67.5% of its earnings in the form of a dividend. Chatham Lodging Trust pays out 180.8% 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 has increased its dividend for 3 consecutive years. Chatham Lodging Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
97.9% of Hersha Hospitality Trust shares are owned by institutional investors. Comparatively, 88.6% of Chatham Lodging Trust shares are owned by institutional investors. 8.1% of Hersha Hospitality Trust shares are owned by insiders. Comparatively, 3.6% of Chatham Lodging Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a breakdown of recent ratings for Hersha Hospitality Trust and Chatham Lodging Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hersha Hospitality Trust||1||3||5||0||2.44|
|Chatham Lodging Trust||0||6||1||0||2.14|
Hersha Hospitality Trust currently has a consensus target price of $18.89, indicating a potential upside of 7.26%. Chatham Lodging Trust has a consensus target price of $20.50, indicating a potential upside of 4.86%. Given Hersha Hospitality Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Hersha Hospitality Trust is more favorable than Chatham Lodging Trust.
Volatility and Risk
Hersha Hospitality Trust has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Chatham Lodging Trust has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.
Hersha Hospitality Trust beats Chatham Lodging Trust on 13 of the 17 factors compared between the two stocks.
Hersha Hospitality Trust Company Profile
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.
Chatham Lodging Trust 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). The Company owned 41 hotels with an aggregate of 6,163 rooms located in 16 states and the District of Columbia. 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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