RLJ Lodging Trust (NYSE: RLJ) and Park Hotels & Resorts (NYSE:PK) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Dividends

RLJ Lodging Trust pays an annual dividend of $1.32 per share and has a dividend yield of 6.7%. Park Hotels & Resorts pays an annual dividend of $1.72 per share and has a dividend yield of 6.6%. RLJ Lodging Trust pays out 91.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust has raised its dividend for 6 consecutive years. RLJ Lodging Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares RLJ Lodging Trust and Park Hotels & Resorts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RLJ Lodging Trust $1.12 billion 2.17 $355.90 million $1.45 13.52
Park Hotels & Resorts $2.78 billion 2.00 $732.00 million N/A N/A

Park Hotels & Resorts has higher revenue and earnings than RLJ Lodging Trust.

Profitability

This table compares RLJ Lodging Trust and Park Hotels & Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RLJ Lodging Trust 16.12% 8.16% 4.52%
Park Hotels & Resorts N/A 50.66% 25.50%

Insider & Institutional Ownership

99.9% of RLJ Lodging Trust shares are held by institutional investors. Comparatively, 97.0% of Park Hotels & Resorts shares are held by institutional investors. 2.3% of RLJ Lodging Trust shares are held by insiders. Comparatively, 0.3% of Park Hotels & Resorts shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for RLJ Lodging Trust and Park Hotels & Resorts, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RLJ Lodging Trust 2 2 4 0 2.25
Park Hotels & Resorts 0 8 7 0 2.47

RLJ Lodging Trust currently has a consensus price target of $24.38, suggesting a potential upside of 24.30%. Park Hotels & Resorts has a consensus price target of $35.54, suggesting a potential upside of 37.11%. Given Park Hotels & Resorts’ stronger consensus rating and higher possible upside, analysts plainly believe Park Hotels & Resorts is more favorable than RLJ Lodging Trust.

Summary

Park Hotels & Resorts beats RLJ Lodging Trust on 8 of the 15 factors compared between the two stocks.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-administered real estate investment trust. The Company is engaged in the acquisition of focused-service and compact full-service hotels. As of December 31, 2016, the Company owned 122 hotels with approximately 20,100 rooms, located in 21 states and the District of Columbia, and an interest in one mortgage loan secured by a hotel. Its hotels’ brand affiliations include Residence Inn, Courtyard, SpringHill Suites, Fairfield Inn & Suites, Marriott, Renaissance, Hilton Garden Inn, Hampton Inn/Hampton Inn & Suites, Embassy Suites, DoubleTree, Homewood Suites, Hilton, Hyatt House, Hyatt Place and Hyatt/Hyatt Centric. Its operating partnership is RLJ Lodging Trust, L.P. Its properties include Courtyard San Francisco, Courtyard Boulder Longmont, Residence Inn Longmont Boulder, DoubleTree Grand Key Resort, Courtyard Atlanta Buckhead, Courtyard Chicago Southeast Hammond, Courtyard Louisville Northeast, DoubleTree Hotel Columbia and Residence Inn Detroit Novi.

About Park Hotels & Resorts

Park Hotels & Resorts Inc. is a lodging real estate company. The Company has a portfolio of hotels and resorts. The Company operates through ownership segment, which includes all of its hotel properties. As of December 31, 2016, the Company’s portfolio consisted of 67 hotels and resorts with over 35,000 rooms located in the United States and international markets. Its portfolio includes hotels in areas, such as New York City, Washington, D.C., Chicago, San Francisco and London; resorts in leisure destinations, including Hawaii, Orlando and Key West, and a range of properties adjacent to gateway airports, such as Los Angeles International, Chicago O’Hare, Boston Logan and Miami Airport, and select suburban locations. The Company’s brand affiliations include Conrad Hotels & Resorts, DoubleTree by Hilton, Embassy Suites by Hilton, Hampton by Hilton, Hilton Hotels & Resorts, Hilaton Garden Inn, Curio – A Collection by Hilton, and Waldorf Astoria Hotels & Resorts.

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