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

Profitability

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

Net Margins Return on Equity Return on Assets
Ashford Hospitality Prime -0.36% -0.43% -0.10%
FelCor Lodging Trust -0.66% N/A -0.35%

Analyst Ratings

This is a summary of recent ratings for Ashford Hospitality Prime and FelCor Lodging Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ashford Hospitality Prime 0 3 4 0 2.57
FelCor Lodging Trust 0 2 0 0 2.00

Ashford Hospitality Prime currently has a consensus price target of $13.40, indicating a potential upside of 45.65%. FelCor Lodging Trust has a consensus price target of $7.00, indicating a potential downside of 4.11%. Given Ashford Hospitality Prime’s stronger consensus rating and higher possible upside, analysts clearly believe Ashford Hospitality Prime is more favorable than FelCor Lodging Trust.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ashford Hospitality Prime $405.86 million 0.72 $19.31 million ($0.25) -36.80
FelCor Lodging Trust N/A N/A N/A ($0.47) -15.53

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

Dividends

Ashford Hospitality Prime pays an annual dividend of $0.64 per share and has a dividend yield of 7.0%. FelCor Lodging Trust pays an annual dividend of $0.24 per share and has a dividend yield of 3.3%. Ashford Hospitality Prime pays out -256.0% of its earnings in the form of a dividend. FelCor Lodging Trust pays out -51.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ashford Hospitality Prime has increased its dividend for 2 consecutive years and FelCor Lodging Trust has increased its dividend for 2 consecutive years. Ashford Hospitality Prime is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

65.1% of Ashford Hospitality Prime shares are owned by institutional investors. Comparatively, 78.8% of FelCor Lodging Trust shares are owned by institutional investors. 10.0% of Ashford Hospitality Prime shares are owned by company insiders. Comparatively, 3.3% of FelCor Lodging Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Ashford Hospitality Prime has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, FelCor Lodging Trust has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.

Summary

Ashford Hospitality Prime beats FelCor Lodging Trust on 10 of the 13 factors compared between the two stocks.

Ashford Hospitality Prime Company Profile

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.

FelCor Lodging Trust Company Profile

FelCor Lodging Trust Incorporated is a real estate investment trust (REIT). The Company, through its subsidiary, FelCor Lodging Limited Partnership, held ownership interests in 39 hotels with 11,500 rooms, as of December 31, 2016. The Company sells, acquires, rebrands and redevelops hotels. As of December 31, 2016, the Company’s hotels were located in 14 states of the United States. The Company holds a portfolio of hotels managed by Hilton Worldwide (Hilton); Wyndham Worldwide (Wyndham); Marriott International Inc. (Marriott); InterContinental Hotels Group (IHG); AccorHotels Group, Highgate Hotels (Highgate), SBE and Aimbridge Hospitality. The Company’s hotels include Embassy Suites Atlanta-Buckhead; DoubleTree Suites by Hilton Austin; Embassy Suites Birmingham; The Fairmont Copley Plaza, Boston; Wyndham Boston Beacon Hill; Embassy Suites Boston-Marlborough, and Sheraton Burlington Hotel & Conference Center.

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