Diamondrock Hospitality (NYSE: DRH) is one of 28 publicly-traded companies in the “Hospitality REITs” industry, but how does it contrast to its peers? We will compare Diamondrock Hospitality to similar companies based on the strength of its institutional ownership, risk, profitability, dividends, analyst recommendations, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Diamondrock Hospitality and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diamondrock Hospitality 3 4 6 0 2.23
Diamondrock Hospitality Competitors 234 932 901 20 2.34

Diamondrock Hospitality presently has a consensus target price of $11.50, suggesting a potential upside of 5.80%. As a group, “Hospitality REITs” companies have a potential upside of 6.10%. Given Diamondrock Hospitality’s peers stronger consensus rating and higher possible upside, analysts clearly believe Diamondrock Hospitality has less favorable growth aspects than its peers.

Valuation & Earnings

This table compares Diamondrock Hospitality and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Diamondrock Hospitality $866.34 million $242.01 million 22.18
Diamondrock Hospitality Competitors $1.10 billion $338.64 million -15.46

Diamondrock Hospitality’s peers have higher revenue and earnings than Diamondrock Hospitality. Diamondrock Hospitality is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Diamondrock Hospitality has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Diamondrock Hospitality’s peers have a beta of 1.00, suggesting that their average stock price is 0% more volatile than the S&P 500.

Institutional and Insider Ownership

77.4% of shares of all “Hospitality REITs” companies are owned by institutional investors. 1.1% of Diamondrock Hospitality shares are owned by insiders. Comparatively, 5.4% of shares of all “Hospitality REITs” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Diamondrock Hospitality and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diamondrock Hospitality 11.47% 5.41% 3.23%
Diamondrock Hospitality Competitors 8.99% 3.14% 2.47%

Dividends

Diamondrock Hospitality pays an annual dividend of $0.50 per share and has a dividend yield of 4.6%. Diamondrock Hospitality pays out 102.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Hospitality REITs” companies pay a dividend yield of 5.5% and pay out 135.4% of their earnings in the form of a dividend.

Summary

Diamondrock Hospitality peers beat Diamondrock Hospitality on 8 of the 15 factors compared.

Diamondrock Hospitality Company Profile

DiamondRock Hospitality Company is a real estate investment trust (REIT). As of December 31, 2016, the Company owned a portfolio of 26 hotels and resorts that contains 9,472 guest rooms located in 17 different markets in North America and the United States Virgin Islands. Its business is to acquire, own, asset manage and renovate hotel properties in the United States. Its portfolio is concentrated in gateway cities and destination resort locations. It conducts its business through an umbrella partnership REIT (UPREIT) in, which its hotels are owned by subsidiaries of its operating partnership, DiamondRock Hospitality Limited Partnership. The Company is the general partner of its operating partnership and owns, either directly or indirectly, all of the limited partnership units of its operating partnership. The Company leases all of its domestic hotels to taxable REIT subsidiary, Bloodstone TRS, Inc. (TRS) lessees.

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