Analyzing RLJ Lodging Trust (NYSE:RLJ) and Sila Realty Trust (NYSE:SILA)

RLJ Lodging Trust (NYSE:RLJ) and Sila Realty Trust (NYSE:SILA) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Insider & Institutional Ownership

92.4% of RLJ Lodging Trust shares are owned by institutional investors. 2.6% of RLJ Lodging Trust shares are owned by company insiders. Comparatively, 0.8% of Sila Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares RLJ Lodging Trust and Sila Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLJ Lodging Trust	2.48%	1.78%	0.69%
Sila Realty Trust	19.86%	2.80%	1.89%

Dividends

RLJ Lodging Trust pays an annual dividend of $0.60 per share and has a dividend yield of 7.7%. Sila Realty Trust pays an annual dividend of $1.60 per share and has a dividend yield of 6.9%. RLJ Lodging Trust pays out 1,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sila Realty Trust pays out 231.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust has raised its dividend for 3 consecutive years. RLJ Lodging Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for RLJ Lodging Trust and Sila Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLJ Lodging Trust	4	3	2	1	2.00
Sila Realty Trust	0	3	1	0	2.25

RLJ Lodging Trust presently has a consensus price target of $8.64, indicating a potential upside of 11.16%. Sila Realty Trust has a consensus price target of $26.67, indicating a potential upside of 14.43%. Given Sila Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Sila Realty Trust is more favorable than RLJ Lodging Trust.

Risk and Volatility

RLJ Lodging Trust has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Sila Realty Trust has a beta of -0.02, indicating that its stock price is 102% less volatile than the S&P 500.

Earnings & Valuation

This table compares RLJ Lodging Trust and Sila Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLJ Lodging Trust	$1.37 billion	0.86	$68.02 million	$0.05	155.50
Sila Realty Trust	$186.86 million	6.87	$42.66 million	$0.69	33.77

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

Summary

RLJ Lodging Trust beats Sila Realty Trust on 10 of the 18 factors compared between the two stocks.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

About Sila Realty Trust

Sila Realty Trust, Inc., headquartered in Tampa, Florida, is a net lease real estate investment trust with a strategic focus on investing in the large, growing, and resilient healthcare sector. The Company invests in high quality healthcare facilities along the continuum of care, which, we believe, generate predictable, durable, and growing income streams. Our portfolio comprises high quality tenants in geographically diverse facilities, which are positioned to capitalize on the dynamic delivery of healthcare to patients. As of June 30, 2024, the Company owned 137 real estate properties and two undeveloped land parcels located in 64 markets across the U.S.