Chesapeake Lodging Trust (NYSE: CHSP) and Chatham Lodging Trust (REIT) (NYSE:CLDT) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitabiliy, earnings and institutional ownership.

Valuation & Earnings

This table compares Chesapeake Lodging Trust and Chatham Lodging Trust (REIT)’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chesapeake Lodging Trust $606.99 million 2.52 $175.85 million $0.97 26.20
Chatham Lodging Trust (REIT) $290.08 million 2.76 $106.90 million $0.66 30.91

Chesapeake Lodging Trust has higher revenue and earnings than Chatham Lodging Trust (REIT). Chesapeake Lodging Trust is trading at a lower price-to-earnings ratio than Chatham Lodging Trust (REIT), indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Chesapeake Lodging Trust has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Chatham Lodging Trust (REIT) has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Insider & Institutional Ownership

98.2% of Chesapeake Lodging Trust shares are owned by institutional investors. Comparatively, 82.8% of Chatham Lodging Trust (REIT) shares are owned by institutional investors. 2.5% of Chesapeake Lodging Trust shares are owned by company insiders. Comparatively, 3.6% of Chatham Lodging Trust (REIT) shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Chesapeake Lodging Trust and Chatham Lodging Trust (REIT)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chesapeake Lodging Trust 10.77% 5.53% 3.19%
Chatham Lodging Trust (REIT) 8.73% 3.76% 1.97%

Analyst Recommendations

This is a summary of recent ratings for Chesapeake Lodging Trust and Chatham Lodging Trust (REIT), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chesapeake Lodging Trust 0 3 1 0 2.25
Chatham Lodging Trust (REIT) 0 3 0 0 2.00

Chesapeake Lodging Trust presently has a consensus price target of $24.50, indicating a potential downside of 3.58%. Chatham Lodging Trust (REIT) has a consensus price target of $19.75, indicating a potential downside of 3.19%. Given Chatham Lodging Trust (REIT)’s higher possible upside, analysts plainly believe Chatham Lodging Trust (REIT) is more favorable than Chesapeake Lodging Trust.

Dividends

Chesapeake Lodging Trust pays an annual dividend of $1.60 per share and has a dividend yield of 6.3%. Chatham Lodging Trust (REIT) pays an annual dividend of $1.32 per share and has a dividend yield of 6.5%. Chesapeake Lodging Trust pays out 164.9% 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 (REIT) pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Lodging Trust has increased its dividend for 2 consecutive years and Chatham Lodging Trust (REIT) has increased its dividend for 5 consecutive years. Chatham Lodging Trust (REIT) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Chesapeake Lodging Trust beats Chatham Lodging Trust (REIT) on 12 of the 17 factors compared between the two stocks.

Chesapeake Lodging Trust Company Profile

Chesapeake Lodging Trust is a real estate investment trust. The Company is focused on investments primarily in upper-upscale hotels in various business and convention markets and, on a selective basis, select-service hotels in urban settings or other locations in the United States. The Company operates through the hotel ownership segment. The Company conducts its operations primarily though Chesapeake Lodging, L.P., its operating partnership (the Operating Partnership). As of February 17, 2017, the Company owned 22 hotels. As of February 17, 2017, the Company’s portfolio included Hyatt Regency Boston; Hilton Checkers Los Angeles; Boston Marriott Newton; Le Meridien San Francisco; Hotel Indigo San Diego Gaslamp Quarter; Courtyard Washington Capitol Hill/Navy Yard; Hotel Adagio San Francisco, Autograph Collection; Denver Marriott City Center; Hyatt Herald Square New York, and Ace Hotel and Theater Downtown Los Angeles. As of February 17, 2017, the Company’s hotels had 6,694 rooms.

Chatham Lodging Trust (REIT) 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). As of December 31, 2016, the Company owned 38 hotels with an aggregate of 5,712 rooms located in 15 states and the District of Columbia. As of December 31, 2016, 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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