Critical Survey: Industrial Logistics Properties Trust (NASDAQ:ILPT) versus DiamondRock Hospitality (NYSE:DRH)

Industrial Logistics Properties Trust (NASDAQ:ILPT) and DiamondRock Hospitality (NYSE:DRH) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Industrial Logistics Properties Trust and DiamondRock Hospitality, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Industrial Logistics Properties Trust	1	1	0	1	2.33
DiamondRock Hospitality	0	6	3	0	2.33

Industrial Logistics Properties Trust currently has a consensus target price of $5.00, suggesting a potential downside of 8.42%. DiamondRock Hospitality has a consensus target price of $9.91, suggesting a potential upside of 0.37%. Given DiamondRock Hospitality’s higher probable upside, analysts plainly believe DiamondRock Hospitality is more favorable than Industrial Logistics Properties Trust.

Dividends

Industrial Logistics Properties Trust pays an annual dividend of $0.20 per share and has a dividend yield of 3.7%. DiamondRock Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 3.2%. Industrial Logistics Properties Trust pays out -14.8% of its earnings in the form of a dividend. DiamondRock Hospitality pays out 128.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DiamondRock Hospitality has raised its dividend for 1 consecutive years. Industrial Logistics Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

49.1% of Industrial Logistics Properties Trust shares are owned by institutional investors. 1.8% of Industrial Logistics Properties Trust shares are owned by insiders. Comparatively, 1.4% of DiamondRock Hospitality shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Industrial Logistics Properties Trust and DiamondRock Hospitality”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Industrial Logistics Properties Trust	$442.32 million	0.82	-$95.67 million	($1.35)	-4.04
DiamondRock Hospitality	$1.13 billion	1.79	$48.05 million	$0.25	39.48

DiamondRock Hospitality has higher revenue and earnings than Industrial Logistics Properties Trust. Industrial Logistics Properties Trust is trading at a lower price-to-earnings ratio than DiamondRock Hospitality, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Industrial Logistics Properties Trust and DiamondRock Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Industrial Logistics Properties Trust	-19.87%	-9.20%	-1.67%
DiamondRock Hospitality	5.69%	4.04%	2.05%

Volatility and Risk

Industrial Logistics Properties Trust has a beta of 2.48, meaning that its stock price is 148% more volatile than the S&P 500. Comparatively, DiamondRock Hospitality has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Summary

DiamondRock Hospitality beats Industrial Logistics Properties Trust on 11 of the 17 factors compared between the two stocks.

About Industrial Logistics Properties Trust

Industrial Logistics Properties Trust (Nasdaq: ILPT) is a real estate investment trust, or REIT, focused on owning and leasing high quality distribution and logistics properties. As of December 31, 2023, ILPT's portfolio consisted of 411 properties containing approximately 60 million rentable square feet located in 39 states. Approximately 77% of ILPT's annualized rental revenues as of December 31, 2023 are derived from investment grade tenants, tenants that are subsidiaries of investment grade rated entities or Hawaii land leases. ILPT is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. ILPT is headquartered in Newton, MA.

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.