Contrasting Ashford Hospitality Trust (NYSE:AHT) and Diversified Healthcare Trust (NASDAQ:DHC)

Diversified Healthcare Trust (NASDAQ:DHC) and Ashford Hospitality Trust (NYSE:AHT) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Diversified Healthcare Trust and Ashford Hospitality Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	2	1	1	0	1.75
Ashford Hospitality Trust	1	1	0	0	1.50

Diversified Healthcare Trust presently has a consensus target price of $5.75, suggesting a potential downside of 12.21%. Given Diversified Healthcare Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Diversified Healthcare Trust is more favorable than Ashford Hospitality Trust.

Earnings & Valuation

This table compares Diversified Healthcare Trust and Ashford Hospitality Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.50 billion	1.06	-$370.26 million	($1.46)	-4.49
Ashford Hospitality Trust	$1.17 billion	0.02	-$60.30 million	($46.97)	-0.07

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

Profitability

This table compares Diversified Healthcare Trust and Ashford Hospitality Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-22.90%	-18.90%	-7.20%
Ashford Hospitality Trust	-20.94%	N/A	-7.63%

Institutional and Insider Ownership

76.0% of Diversified Healthcare Trust shares are held by institutional investors. Comparatively, 41.0% of Ashford Hospitality Trust shares are held by institutional investors. 10.1% of Diversified Healthcare Trust shares are held by company insiders. Comparatively, 1.3% of Ashford Hospitality Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Diversified Healthcare Trust has a beta of 2.43, indicating that its stock price is 143% more volatile than the S&P 500. Comparatively, Ashford Hospitality Trust has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500.

Summary

Diversified Healthcare Trust beats Ashford Hospitality Trust on 10 of the 14 factors compared between the two stocks.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.

About Ashford Hospitality Trust

Ashford Hospitality Trust, Inc., together with its subsidiaries (Ashford Trust), is a real estate investment trust (REIT). While our portfolio currently consists of upscale hotels and upper upscale full-service hotels, our investment strategy is predominantly focused on investing in upper upscale full-service hotels in the United States that have revenue per available room (RevPAR) generally less than twice the U.S. national average, and in all methods including direct real estate, equity, and debt. We currently anticipate future investments will predominantly be in upper upscale hotels. We own our lodging investments and conduct our business through Ashford Hospitality Limited Partnership (Ashford Trust OP), our operating partnership. Ashford OP General Partner LLC, a wholly owned subsidiary of Ashford Trust, serves as the sole general partner of our operating partnership.