Comparing Sotherly Hotels (NASDAQ:SOHO) and Generation Income Properties (NASDAQ:GIPR)

Generation Income Properties (NASDAQ:GIPR) and Sotherly Hotels (NASDAQ:SOHO) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Generation Income Properties and Sotherly Hotels’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Generation Income Properties	-74.91%	-79.71%	-6.63%
Sotherly Hotels	2.27%	7.81%	0.98%

Risk and Volatility

Generation Income Properties has a beta of -0.18, meaning that its stock price is 118% less volatile than the S&P 500. Comparatively, Sotherly Hotels has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500.

Valuation & Earnings

This table compares Generation Income Properties and Sotherly Hotels’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Generation Income Properties	$7.63 million	2.66	-$5.72 million	($2.42)	-1.55
Sotherly Hotels	$173.84 million	0.13	$3.94 million	($0.21)	-5.62

Sotherly Hotels has higher revenue and earnings than Generation Income Properties. Sotherly Hotels is trading at a lower price-to-earnings ratio than Generation Income Properties, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Generation Income Properties and Sotherly Hotels, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Generation Income Properties	0	0	1	0	3.00
Sotherly Hotels	0	1	0	0	2.00

Generation Income Properties currently has a consensus price target of $5.00, suggesting a potential upside of 33.33%. Sotherly Hotels has a consensus price target of $2.25, suggesting a potential upside of 90.68%. Given Sotherly Hotels’ higher possible upside, analysts plainly believe Sotherly Hotels is more favorable than Generation Income Properties.

Institutional and Insider Ownership

20.7% of Generation Income Properties shares are owned by institutional investors. Comparatively, 27.5% of Sotherly Hotels shares are owned by institutional investors. 11.5% of Generation Income Properties shares are owned by company insiders. Comparatively, 15.9% of Sotherly Hotels shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Sotherly Hotels beats Generation Income Properties on 10 of the 14 factors compared between the two stocks.

About Generation Income Properties

Generation Income Properties, Inc., located in Tampa, Florida, is an internally managed real estate investment trust formed to acquire and own, directly and jointly, real estate investments focused on retail, office, and industrial net lease properties in densely populated submarkets.

About Sotherly Hotels

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.