Analyzing Seritage Growth Properties (NYSE:SRG) and DiamondRock Hospitality (NYSE:DRH)

DiamondRock Hospitality (NYSE:DRH) and Seritage Growth Properties (NYSE:SRG) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitability and earnings.

Insider & Institutional Ownership

78.9% of Seritage Growth Properties shares are owned by institutional investors. 0.9% of DiamondRock Hospitality shares are owned by insiders. Comparatively, 0.2% of Seritage Growth Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

DiamondRock Hospitality has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Seritage Growth Properties has a beta of 2.19, indicating that its stock price is 119% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for DiamondRock Hospitality and Seritage Growth Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DiamondRock Hospitality	0	7	3	0	2.30
Seritage Growth Properties	1	0	0	0	1.00

DiamondRock Hospitality currently has a consensus target price of $11.65, suggesting a potential downside of 3.56%. Given DiamondRock Hospitality’s stronger consensus rating and higher possible upside, equities analysts clearly believe DiamondRock Hospitality is more favorable than Seritage Growth Properties.

Profitability

This table compares DiamondRock Hospitality and Seritage Growth Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DiamondRock Hospitality	5.69%	4.04%	2.05%
Seritage Growth Properties	-487.58%	-23.03%	-16.16%

Valuation and Earnings

This table compares DiamondRock Hospitality and Seritage Growth Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DiamondRock Hospitality	$1.12 billion	2.20	$48.05 million	$0.47	25.70
Seritage Growth Properties	$18.20 million	8.25	-$68.21 million	($1.44)	-1.85

DiamondRock Hospitality has higher revenue and earnings than Seritage Growth Properties. Seritage Growth Properties is trading at a lower price-to-earnings ratio than DiamondRock Hospitality, indicating that it is currently the more affordable of the two stocks.

Summary

DiamondRock Hospitality beats Seritage Growth Properties on 11 of the 14 factors compared between the two stocks.

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.

About Seritage Growth Properties

Seritage Growth Properties operates as a real estate investment trust. The firm engages in the acquisition, ownership, development, redevelopment, management, and leasing of retail properties throughout the United States. Its property portfolio includes mall, shopping centers and freestanding locations. The company was founded on June 3, 2015 and is headquartered in New York, NY.