Hersha Hospitality Trust (NYSE: HT) and Summit Hotel Properties (NYSE:INN) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitabiliy and dividends.

Risk and Volatility

Hersha Hospitality Trust has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Summit Hotel Properties has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Dividends

Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.2%. Summit Hotel Properties pays an annual dividend of $0.68 per share and has a dividend yield of 4.4%. Hersha Hospitality Trust pays out 48.7% of its earnings in the form of a dividend. Summit Hotel Properties pays out 75.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hersha Hospitality Trust has raised its dividend for 3 consecutive years and Summit Hotel Properties has raised its dividend for 3 consecutive years. Hersha Hospitality Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations and price targets for Hersha Hospitality Trust and Summit Hotel Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hersha Hospitality Trust 1 4 2 0 2.14
Summit Hotel Properties 0 1 6 0 2.86

Hersha Hospitality Trust presently has a consensus target price of $20.00, indicating a potential upside of 10.31%. Summit Hotel Properties has a consensus target price of $18.17, indicating a potential upside of 16.98%. Given Summit Hotel Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Summit Hotel Properties is more favorable than Hersha Hospitality Trust.

Insider & Institutional Ownership

96.6% of Hersha Hospitality Trust shares are owned by institutional investors. Comparatively, 88.2% of Summit Hotel Properties shares are owned by institutional investors. 8.1% of Hersha Hospitality Trust shares are owned by insiders. Comparatively, 1.9% of Summit Hotel Properties shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Hersha Hospitality Trust and Summit Hotel Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hersha Hospitality Trust 22.77% 14.78% 6.13%
Summit Hotel Properties 21.97% 9.89% 5.83%

Earnings & Valuation

This table compares Hersha Hospitality Trust and Summit Hotel Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hersha Hospitality Trust $471.75 million 1.61 $138.69 million $2.30 7.88
Summit Hotel Properties $475.70 million 3.40 $154.58 million $0.90 17.26

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

Summary

Hersha Hospitality Trust beats Summit Hotel Properties on 9 of the 16 factors compared between the two stocks.

About Hersha Hospitality Trust

Hersha Hospitality Trust is a self-advised real estate investment trust (REIT). The Company invests primarily in institutional grade hotels in urban gateway markets, including New York, Washington, District of Columbia, Boston, Philadelphia, South Florida and select markets on the West Coast. As of July 20, 2017, the Company’s hotels included 51 hotels totaling 7,804 rooms located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company’s property brands include Marriott International, Hilton Hotels, Hyatt Hotels, Intercontinental Hotel Group, Wyndham Hotels and Hersha’s Independent Hotel Collection.

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a real estate investment trust (REIT). The Company is focused primarily on owning premium-branded, select-service hotels in the Upscale segment of the United States lodging industry. The Company’s portfolio consists of 81 hotels with a total of 11,608 guestrooms located in 24 states. The Company’s hotels are located in markets, such as business and corporate headquarters, retail centers, airports and tourist attractions. The Company’s portfolio is located in urban and suburban markets. Based on total number of guestrooms, approximately 92% of the Company’s portfolio is positioned in over 50 metropolitan statistical areas (MSAs), and approximately 96% is located within over 100 MSAs. Based on total number of guestrooms, approximately 99% of the Company’s hotels operate under franchise brands owned by Marriott International, Inc., Hilton Worldwide, InterContinental Hotels Group, and an affiliate of Hyatt Hotels Corporation.

Receive News & Stock Ratings for Hersha Hospitality Trust Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Hersha Hospitality Trust and related stocks with our FREE daily email newsletter.