SOTHERLY HOTELS/SH SH (NASDAQ:SOHO) and WP Carey (NYSE:WPC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.

Analyst Ratings

This is a summary of recent ratings for SOTHERLY HOTELS/SH SH and WP Carey, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SOTHERLY HOTELS/SH SH 0 0 0 0 N/A
WP Carey 1 4 0 0 1.80

WP Carey has a consensus price target of $77.00, indicating a potential downside of 12.16%. Given WP Carey’s higher probable upside, analysts clearly believe WP Carey is more favorable than SOTHERLY HOTELS/SH SH.

Insider and Institutional Ownership

30.1% of SOTHERLY HOTELS/SH SH shares are owned by institutional investors. Comparatively, 56.3% of WP Carey shares are owned by institutional investors. 14.4% of SOTHERLY HOTELS/SH SH shares are owned by company insiders. Comparatively, 1.1% of WP Carey 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.

Risk & Volatility

SOTHERLY HOTELS/SH SH has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, WP Carey has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Dividends

SOTHERLY HOTELS/SH SH pays an annual dividend of $0.52 per share and has a dividend yield of 7.7%. WP Carey pays an annual dividend of $4.14 per share and has a dividend yield of 4.7%. SOTHERLY HOTELS/SH SH pays out 50.0% of its earnings in the form of a dividend. WP Carey pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SOTHERLY HOTELS/SH SH has raised its dividend for 5 consecutive years and WP Carey has raised its dividend for 18 consecutive years. SOTHERLY HOTELS/SH SH is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares SOTHERLY HOTELS/SH SH and WP Carey’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SOTHERLY HOTELS/SH SH -1.54% -3.21% -0.57%
WP Carey 38.36% 6.72% 3.17%

Valuation & Earnings

This table compares SOTHERLY HOTELS/SH SH and WP Carey’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SOTHERLY HOTELS/SH SH $178.17 million 0.54 $110,000.00 $1.04 6.51
WP Carey $885.73 million 16.90 $411.57 million $5.39 16.26

WP Carey has higher revenue and earnings than SOTHERLY HOTELS/SH SH. SOTHERLY HOTELS/SH SH is trading at a lower price-to-earnings ratio than WP Carey, indicating that it is currently the more affordable of the two stocks.

Summary

WP Carey beats SOTHERLY HOTELS/SH SH on 11 of the 15 factors compared between the two stocks.

SOTHERLY HOTELS/SH SH Company Profile

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Currently, the Company's portfolio consists of investments in twelve hotel properties, comprising 3,156 rooms, and an interest in the Hyde Resort & Residences, a luxury condo hotel. The Company owns hotels that operate under the Hilton Worldwide, InterContinental Hotels Group and Marriott International, Inc. brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

WP Carey Company Profile

W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $17 billion and a diversified portfolio of operationally-critical commercial real estate that includes 1,163 net lease properties covering approximately 131 million square feet. For over four decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term leases with built-in rent escalators. Its portfolio is located primarily in the U.S. and Northern and Western Europe and is well-diversified by tenant, property type, geographic location and tenant industry.

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