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

Valuation & Earnings

This table compares Hersha Hospitality Trust and Chesapeake Lodging Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hersha Hospitality Trust $471.75 million 1.66 $138.69 million $2.30 8.13
Chesapeake Lodging Trust $606.99 million 2.61 $175.85 million $0.97 27.63

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

Profitability

This table compares Hersha Hospitality Trust and Chesapeake Lodging Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hersha Hospitality Trust 22.77% 14.78% 6.13%
Chesapeake Lodging Trust 10.77% 5.53% 3.19%

Volatility and Risk

Hersha Hospitality Trust has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Chesapeake Lodging Trust has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Hersha Hospitality Trust and Chesapeake Lodging Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hersha Hospitality Trust 1 4 4 0 2.33
Chesapeake Lodging Trust 0 3 2 0 2.40

Hersha Hospitality Trust presently has a consensus target price of $19.89, suggesting a potential upside of 6.30%. Chesapeake Lodging Trust has a consensus target price of $26.50, suggesting a potential downside of 1.12%. Given Hersha Hospitality Trust’s higher possible upside, research analysts plainly believe Hersha Hospitality Trust is more favorable than Chesapeake Lodging Trust.

Dividends

Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.0%. Chesapeake Lodging Trust pays an annual dividend of $1.60 per share and has a dividend yield of 6.0%. Hersha Hospitality Trust pays out 48.7% of its earnings in the form of a dividend. Chesapeake Lodging Trust pays out 164.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hersha Hospitality Trust has increased its dividend for 5 consecutive years and Chesapeake Lodging Trust has increased its dividend for 3 consecutive years. Hersha Hospitality Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

98.4% of Hersha Hospitality Trust shares are owned by institutional investors. Comparatively, 98.5% of Chesapeake Lodging Trust shares are owned by institutional investors. 8.1% of Hersha Hospitality Trust shares are owned by company insiders. Comparatively, 2.5% of Chesapeake Lodging Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Hersha Hospitality Trust beats Chesapeake Lodging Trust on 11 of the 17 factors compared between the two stocks.

Hersha Hospitality Trust Company Profile

Hersha Hospitality Trust is a self-advised real estate investment trust (REIT). The Company invests primarily in institutional grade hotels in urban gateway markets, including New York, Washington, District of Columbia, Boston, Philadelphia, South Florida and select markets on the West Coast. As of July 20, 2017, the Company’s hotels included 51 hotels totaling 7,804 rooms located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company’s property brands include Marriott International, Hilton Hotels, Hyatt Hotels, Intercontinental Hotel Group, Wyndham Hotels and Hersha’s Independent Hotel Collection.

Chesapeake Lodging Trust Company Profile

Chesapeake Lodging Trust is a real estate investment trust. The Company is focused on investments primarily in upper-upscale hotels in various business and convention markets and, on a selective basis, select-service hotels in urban settings or other locations in the United States. The Company operates through the hotel ownership segment. The Company conducts its operations primarily though Chesapeake Lodging, L.P., its operating partnership (the Operating Partnership). As of February 17, 2017, the Company owned 22 hotels. As of February 17, 2017, the Company’s portfolio included Hyatt Regency Boston; Hilton Checkers Los Angeles; Boston Marriott Newton; Le Meridien San Francisco; Hotel Indigo San Diego Gaslamp Quarter; Courtyard Washington Capitol Hill/Navy Yard; Hotel Adagio San Francisco, Autograph Collection; Denver Marriott City Center; Hyatt Herald Square New York, and Ace Hotel and Theater Downtown Los Angeles. As of February 17, 2017, the Company’s hotels had 6,694 rooms.

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