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

Earnings and Valuation

This table compares Ashford Hospitality Prime and Hersha Hospitality Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ashford Hospitality Prime $407.02 million 0.74 $100.67 million $0.36 26.56
Hersha Hospitality Trust $471.75 million 1.60 $138.69 million $2.30 7.83

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

Volatility and Risk

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

Dividends

Ashford Hospitality Prime pays an annual dividend of $0.64 per share and has a dividend yield of 6.7%. Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.2%. Ashford Hospitality Prime pays out 177.8% 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 pays out 48.7% of its earnings in the form of a dividend. Ashford Hospitality Prime has raised its dividend for 2 consecutive years and Hersha Hospitality Trust has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

69.5% of Ashford Hospitality Prime shares are held by institutional investors. Comparatively, 98.5% of Hersha Hospitality Trust shares are held by institutional investors. 10.0% of Ashford Hospitality Prime shares are held by insiders. Comparatively, 8.1% of Hersha Hospitality Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Ashford Hospitality Prime and Hersha Hospitality Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ashford Hospitality Prime 0 3 3 0 2.50
Hersha Hospitality Trust 1 4 3 0 2.25

Ashford Hospitality Prime presently has a consensus target price of $13.40, indicating a potential upside of 40.17%. Hersha Hospitality Trust has a consensus target price of $19.75, indicating a potential upside of 9.72%. Given Ashford Hospitality Prime’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ashford Hospitality Prime is more favorable than Hersha Hospitality Trust.

Profitability

This table compares Ashford Hospitality Prime and Hersha Hospitality Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ashford Hospitality Prime 4.02% 4.88% 1.20%
Hersha Hospitality Trust 22.77% 14.78% 6.13%

Summary

Hersha Hospitality Trust beats Ashford Hospitality Prime on 11 of the 16 factors compared between the two stocks.

About Ashford Hospitality Prime

Ashford Hospitality Prime, Inc. invests in high revenue per available room (RevPAR), luxury hotels and resorts. The Company conducts its business and owns all of its assets through its operating partnership, Ashford Hospitality Prime Limited Partnership (Ashford Prime OP). The Company operates in the direct hotel investment segment of the hotel lodging industry. As of February 24, 2017, it owned interests in 11 hotel properties in six states, the District of Columbia and St. Thomas, the United States Virgin Islands with 3,702 total rooms, or 3,467 net rooms, excluding those attributable to its joint venture partner. The hotel properties in its portfolio are mainly located in the Unites States urban markets. The Company owns nine of its hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated entity. All of the hotels in the Company’s portfolio are asset-managed by Ashford Hospitality Advisors LLC.

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.

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