Sotherly Hotels (NASDAQ: SOHO) and Host Hotels & Resorts (NYSE:HST) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings and Valuation

This table compares Sotherly Hotels and Host Hotels & Resorts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Sotherly Hotels $152.85 million 0.62 $920,000.00 ($0.01) -681.32
Host Hotels & Resorts $5.43 billion 2.70 $762.00 million $0.80 24.75

Host Hotels & Resorts has higher revenue and earnings than Sotherly Hotels. Sotherly Hotels is trading at a lower price-to-earnings ratio than Host Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

27.3% of Sotherly Hotels shares are owned by institutional investors. 13.8% of Sotherly Hotels shares are owned by insiders. Comparatively, 1.7% of Host Hotels & Resorts shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Sotherly Hotels and Host Hotels & Resorts, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sotherly Hotels 0 1 1 0 2.50
Host Hotels & Resorts 1 7 6 0 2.36

Sotherly Hotels presently has a consensus target price of $8.00, suggesting a potential upside of 17.30%. Host Hotels & Resorts has a consensus target price of $20.05, suggesting a potential upside of 1.26%. Given Sotherly Hotels’ stronger consensus rating and higher probable upside, research analysts plainly believe Sotherly Hotels is more favorable than Host Hotels & Resorts.

Dividends

Sotherly Hotels pays an annual dividend of $0.44 per share and has a dividend yield of 6.5%. Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. Sotherly Hotels pays out -4,395.6% of its earnings in the form of a dividend. Host Hotels & Resorts pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts has raised its dividend for 6 consecutive years. Sotherly Hotels is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Sotherly Hotels and Host Hotels & Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sotherly Hotels 2.01% 3.98% 0.75%
Host Hotels & Resorts 11.11% 8.44% 5.11%

Risk and Volatility

Sotherly Hotels has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Host Hotels & Resorts has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Summary

Host Hotels & Resorts beats Sotherly Hotels on 11 of the 17 factors compared between the two stocks.

About Sotherly Hotels

Sotherly Hotels Inc. is a self-managed and self-administered lodging real estate investment trust. The Company is focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the southern United States. The Company operates through the hotel ownership segment. The Company conducts its operations through Sotherly Hotels LP, its Operating Partnership, of which the Company is the general partner. Its portfolio consists of approximately 10 full-service, mainly upscale and upper-upscale hotels located in over eight states with an aggregate of approximately 3,010 rooms and approximately 160,930 square feet of meeting space. All of these hotels are owned by subsidiaries of the Operating Partnership, approximately 10 operate under the Hilton, Crowne Plaza, DoubleTree and Sheraton brands, one is an independent hotel, and all are managed on a day to day basis by MHI Hotels Services, LLC, which does business as Chesapeake Hospitality.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. (Host Inc.) operates as a self-managed and self-administered real estate investment trust (REIT). The Company operates through hotel ownership segment. The Company operates through hotel ownership segment. The Company owned properties and conducted operations through Host Hotels & Resorts, L.P. (Host L.P.), of which Host Inc. was the general partner and of which it held approximately 99% of the partnership interests (OP units), as of December 31, 2016. As of February 20, 2017, its lodging portfolio consisted of 96 primarily luxury and upper-upscale hotels containing approximately 53,500 rooms, with the majority located in the United States, and with seven of the properties located outside of the United States in Australia, Brazil, Canada and Mexico. In addition, it owns non-controlling interests in two international joint ventures: approximately a 33% interest in a joint venture in Europe, and a 9% indirect interest, through joint ventures in India.

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