Head to Head Review: BRAEMAR HOTELS & RESORTS (NYSE:BHR) vs. Sunstone Hotel Investors (NYSE:SHO)

Sunstone Hotel Investors (NYSE:SHO) and BRAEMAR HOTELS & RESORTS (NYSE:BHR) are both small-cap real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Sunstone Hotel Investors and BRAEMAR HOTELS & RESORTS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunstone Hotel Investors	1	6	0	1	2.12
BRAEMAR HOTELS & RESORTS	1	2	0	0	1.67

Sunstone Hotel Investors presently has a consensus price target of $10.67, indicating a potential downside of 0.75%. BRAEMAR HOTELS & RESORTS has a consensus price target of $2.50, indicating a potential upside of 23.46%. Given BRAEMAR HOTELS & RESORTS’s higher possible upside, analysts clearly believe BRAEMAR HOTELS & RESORTS is more favorable than Sunstone Hotel Investors.

Dividends

Sunstone Hotel Investors pays an annual dividend of $0.36 per share and has a dividend yield of 3.3%. BRAEMAR HOTELS & RESORTS pays an annual dividend of $0.20 per share and has a dividend yield of 9.9%. Sunstone Hotel Investors pays out 163.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BRAEMAR HOTELS & RESORTS pays out -27.4% of its earnings in the form of a dividend. Sunstone Hotel Investors has raised its dividend for 2 consecutive years. BRAEMAR HOTELS & RESORTS is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Sunstone Hotel Investors has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, BRAEMAR HOTELS & RESORTS has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Institutional & Insider Ownership

99.4% of Sunstone Hotel Investors shares are owned by institutional investors. Comparatively, 64.8% of BRAEMAR HOTELS & RESORTS shares are owned by institutional investors. 1.4% of Sunstone Hotel Investors shares are owned by company insiders. Comparatively, 8.2% of BRAEMAR HOTELS & RESORTS shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Sunstone Hotel Investors and BRAEMAR HOTELS & RESORTS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunstone Hotel Investors	5.30%	3.21%	1.75%
BRAEMAR HOTELS & RESORTS	-0.45%	-1.87%	-0.16%

Valuation & Earnings

This table compares Sunstone Hotel Investors and BRAEMAR HOTELS & RESORTS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunstone Hotel Investors	$1.00 billion	2.00	$24.57 million	$0.22	48.85
BRAEMAR HOTELS & RESORTS	$689.13 million	0.20	-$22.32 million	($0.73)	-2.77

Sunstone Hotel Investors has higher revenue and earnings than BRAEMAR HOTELS & RESORTS. BRAEMAR HOTELS & RESORTS is trading at a lower price-to-earnings ratio than Sunstone Hotel Investors, indicating that it is currently the more affordable of the two stocks.

Summary

Sunstone Hotel Investors beats BRAEMAR HOTELS & RESORTS on 13 of the 17 factors compared between the two stocks.

About Sunstone Hotel Investors

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 14 hotels comprised of 6,675 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate.

About BRAEMAR HOTELS & RESORTS

Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).