Head-To-Head Analysis: Sunstone Hotel Investors (NYSE:SHO) and Clipper Realty (NYSE:CLPR)

Sunstone Hotel Investors (NYSE:SHO) and Clipper Realty (NYSE:CLPR) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Volatility and Risk

Sunstone Hotel Investors has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Clipper Realty has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Profitability

This table compares Sunstone Hotel Investors and Clipper Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunstone Hotel Investors	3.84%	2.27%	1.25%
Clipper Realty	-7.10%	N/A	-0.87%

Insider and Institutional Ownership

99.4% of Sunstone Hotel Investors shares are owned by institutional investors. Comparatively, 37.6% of Clipper Realty shares are owned by institutional investors. 1.4% of Sunstone Hotel Investors shares are owned by insiders. Comparatively, 54.6% of Clipper Realty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Sunstone Hotel Investors pays an annual dividend of $0.36 per share and has a dividend yield of 3.1%. Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 13.1%. Sunstone Hotel Investors pays out 327.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Clipper Realty pays out -46.9% of its earnings in the form of a dividend. Sunstone Hotel Investors has raised its dividend for 2 consecutive years. Clipper Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Sunstone Hotel Investors and Clipper Realty”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunstone Hotel Investors	$960.13 million	2.28	$24.57 million	$0.11	106.77
Clipper Realty	$153.20 million	0.30	-$19.90 million	($0.81)	-3.57

Sunstone Hotel Investors has higher revenue and earnings than Clipper Realty. Clipper Realty is trading at a lower price-to-earnings ratio than Sunstone Hotel Investors, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Sunstone Hotel Investors and Clipper Realty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunstone Hotel Investors	1	5	2	1	2.33
Clipper Realty	0	1	0	0	2.00

Sunstone Hotel Investors presently has a consensus price target of $10.71, indicating a potential downside of 8.78%. Given Sunstone Hotel Investors’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Sunstone Hotel Investors is more favorable than Clipper Realty.

Summary

Sunstone Hotel Investors beats Clipper Realty on 14 of the 18 factors compared between the two stocks.

About Sunstone Hotel Investors

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 14 hotels comprised of 6,675 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate.

About Clipper Realty

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn.