Comparing Sotherly Hotels (NASDAQ:SOHO) & Douglas Emmett (NYSE:DEI)

Sotherly Hotels (NASDAQ:SOHO) and Douglas Emmett (NYSE:DEI) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Volatility & Risk

Sotherly Hotels has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sotherly Hotels and Douglas Emmett”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$179.07 million	0.25	$1.30 million	($0.42)	-5.14
Douglas Emmett	$999.53 million	1.86	$23.52 million	$0.12	92.43

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

Profitability

This table compares Sotherly Hotels and Douglas Emmett’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	-0.15%	-0.64%	-0.06%
Douglas Emmett	2.22%	0.62%	0.24%

Dividends

Sotherly Hotels pays an annual dividend of $0.52 per share and has a dividend yield of 24.1%. Douglas Emmett pays an annual dividend of $0.76 per share and has a dividend yield of 6.9%. Sotherly Hotels pays out -123.8% of its earnings in the form of a dividend. Douglas Emmett pays out 633.3% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and price targets for Sotherly Hotels and Douglas Emmett, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	1	1	0	0	1.50
Douglas Emmett	0	7	2	0	2.22

Douglas Emmett has a consensus target price of $15.00, suggesting a potential upside of 35.24%. Given Douglas Emmett’s stronger consensus rating and higher probable upside, analysts plainly believe Douglas Emmett is more favorable than Sotherly Hotels.

Institutional & Insider Ownership

27.5% of Sotherly Hotels shares are held by institutional investors. Comparatively, 97.4% of Douglas Emmett shares are held by institutional investors. 14.9% of Sotherly Hotels shares are held by insiders. Comparatively, 15.1% of Douglas Emmett shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Douglas Emmett beats Sotherly Hotels on 14 of the 16 factors compared between the two stocks.

About Sotherly Hotels

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. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

About Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.