Hersha Hospitality Trust (NYSE: HT) and Apple Hospitality REIT (NYSE:APLE) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Risk & Volatility

Hersha Hospitality Trust has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Apple Hospitality REIT has a beta of 0.6, suggesting that its share price is 40% less 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 6.1%. Apple Hospitality REIT pays an annual dividend of $1.20 per share and has a dividend yield of 6.7%. Hersha Hospitality Trust pays out 48.7% of its earnings in the form of a dividend. Apple Hospitality REIT pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apple Hospitality REIT has raised its dividend for 3 consecutive years. Apple Hospitality REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

98.5% of Hersha Hospitality Trust shares are held by institutional investors. Comparatively, 49.2% of Apple Hospitality REIT shares are held by institutional investors. 8.1% of Hersha Hospitality Trust shares are held by insiders. Comparatively, 6.3% of Apple Hospitality REIT shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Hersha Hospitality Trust and Apple Hospitality REIT’s 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%
Apple Hospitality REIT 14.97% 5.05% 3.57%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Hersha Hospitality Trust and Apple Hospitality REIT, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hersha Hospitality Trust 1 4 2 0 2.14
Apple Hospitality REIT 1 3 1 0 2.00

Hersha Hospitality Trust currently has a consensus target price of $20.00, indicating a potential upside of 9.53%. Apple Hospitality REIT has a consensus target price of $18.25, indicating a potential upside of 2.01%. Given Hersha Hospitality Trust’s stronger consensus rating and higher possible upside, research analysts clearly believe Hersha Hospitality Trust is more favorable than Apple Hospitality REIT.

Valuation and Earnings

This table compares Hersha Hospitality Trust and Apple Hospitality REIT’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hersha Hospitality Trust $471.75 million 1.62 $138.69 million $2.30 7.94
Apple Hospitality REIT $1.18 billion 3.38 $420.26 million $0.80 22.36

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

Summary

Hersha Hospitality Trust beats Apple Hospitality REIT on 11 of the 17 factors compared between the two stocks.

Hersha Hospitality Trust Company Profile

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.

Apple Hospitality REIT Company Profile

Apple Hospitality REIT, Inc. is a hospitality real estate investment trust. The Company invests in real estate, primarily in the lodging sector, in the United States. As of December 31, 2016, the Company owned 235 hotels with an aggregate of 30,073 rooms located in urban, suburban and developing markets throughout 33 states. As of December 31, 2016, the Company’s hotels included various brands, such as Hilton Garden Inn, Courtyard, Homewood Suites, Residence Inn, SpringHill Suites, TownePlace Suites, Fairfield Inn, Home2 Suites, Marriott, Embassy Suites, Hilton and Renaissance. As of December 31, 2016, the Company’s hotels were located in various states of the United States, such as Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, Ohio, South Carolina, Texas, Utah and Virginia.

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