Head-To-Head Survey: Gladstone Commercial (NASDAQ:GOOD) and Chatham Lodging Trust (NYSE:CLDT)

Gladstone Commercial (NASDAQ:GOOD) and Chatham Lodging Trust (NYSE:CLDT) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.

Profitability

This table compares Gladstone Commercial and Chatham Lodging Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gladstone Commercial	12.74%	12.11%	1.71%
Chatham Lodging Trust	3.14%	1.18%	0.77%

Dividends

Gladstone Commercial pays an annual dividend of $1.20 per share and has a dividend yield of 9.9%. Chatham Lodging Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.1%. Gladstone Commercial pays out 666.7% 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 pays out 2,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust has raised its dividend for 2 consecutive years. Gladstone Commercial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

45.5% of Gladstone Commercial shares are owned by institutional investors. Comparatively, 88.4% of Chatham Lodging Trust shares are owned by institutional investors. 1.3% of Gladstone Commercial shares are owned by company insiders. Comparatively, 8.1% of Chatham Lodging Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Gladstone Commercial and Chatham Lodging Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gladstone Commercial	0	3	0	0	2.00
Chatham Lodging Trust	0	3	2	0	2.40

Gladstone Commercial presently has a consensus target price of $12.75, indicating a potential upside of 4.85%. Chatham Lodging Trust has a consensus target price of $12.50, indicating a potential downside of 4.68%. Given Gladstone Commercial’s higher possible upside, analysts clearly believe Gladstone Commercial is more favorable than Chatham Lodging Trust.

Valuation and Earnings

This table compares Gladstone Commercial and Chatham Lodging Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gladstone Commercial	$161.34 million	3.65	$19.29 million	$0.18	67.56
Chatham Lodging Trust	$295.08 million	2.07	$15.05 million	$0.02	655.70

Gladstone Commercial has higher earnings, but lower revenue than Chatham Lodging Trust. Gladstone Commercial 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.

Volatility & Risk

Gladstone Commercial has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Chatham Lodging Trust has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.

Summary

Gladstone Commercial beats Chatham Lodging Trust on 9 of the 17 factors compared between the two stocks.

About Gladstone Commercial

Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Including payments through January 2024, Gladstone Commercial has paid 229 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, Gladstone Commercial paid five consecutive quarterly cash distributions. Gladstone Commercial has never skipped or deferred a distribution since its inception in 2003.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia.