Comparing Prologis (NYSE:PLD) & DiamondRock Hospitality (NYSE:DRH)

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

Valuation and Earnings

This table compares Prologis and DiamondRock Hospitality’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prologis	$8.02 billion	14.74	$3.06 billion	$3.29	38.87
DiamondRock Hospitality	$1.07 billion	1.84	$86.34 million	$0.36	26.25

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Prologis and DiamondRock Hospitality, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prologis	0	3	10	1	2.86
DiamondRock Hospitality	0	4	2	0	2.33

Prologis currently has a consensus target price of $142.47, indicating a potential upside of 11.41%. DiamondRock Hospitality has a consensus target price of $9.92, indicating a potential upside of 4.94%. Given Prologis’ stronger consensus rating and higher probable upside, analysts clearly believe Prologis is more favorable than DiamondRock Hospitality.

Insider & Institutional Ownership

90.9% of Prologis shares are owned by institutional investors. 0.7% of Prologis shares are owned by company insiders. Comparatively, 1.4% of DiamondRock Hospitality shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Prologis and DiamondRock Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prologis	38.13%	5.29%	3.34%
DiamondRock Hospitality	8.03%	5.29%	2.68%

Dividends

Prologis pays an annual dividend of $3.84 per share and has a dividend yield of 3.0%. DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. Prologis pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DiamondRock Hospitality pays out 33.3% of its earnings in the form of a dividend. Prologis has raised its dividend for 11 consecutive years. Prologis is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Prologis has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, DiamondRock Hospitality has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.

Summary

Prologis beats DiamondRock Hospitality on 14 of the 17 factors compared between the two stocks.

About Prologis

Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. At December 31, 2023, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.2 billion square feet (115 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 6,700 customers principally across two major categories: business-to-business and retail/online fulfillment.

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.