Host Hotels & Resorts (NASDAQ:HST) versus American Hotel Income Properties REIT (OTCMKTS:AHOTF) Critical Analysis

American Hotel Income Properties REIT (OTCMKTS:AHOTF) and Host Hotels & Resorts (NASDAQ:HST) are both real estate companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and price targets for American Hotel Income Properties REIT and Host Hotels & Resorts, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Hotel Income Properties REIT	0	0	0	0	0.00
Host Hotels & Resorts	0	6	9	1	2.69

Host Hotels & Resorts has a consensus price target of $24.33, indicating a potential upside of 6.84%. Given Host Hotels & Resorts’ stronger consensus rating and higher possible upside, analysts clearly believe Host Hotels & Resorts is more favorable than American Hotel Income Properties REIT.

Insider and Institutional Ownership

10.3% of American Hotel Income Properties REIT shares are held by institutional investors. Comparatively, 98.5% of Host Hotels & Resorts shares are held by institutional investors. 1.5% of Host Hotels & Resorts shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares American Hotel Income Properties REIT and Host Hotels & Resorts”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Hotel Income Properties REIT	N/A	N/A	N/A	$0.06	6.25
Host Hotels & Resorts	$6.22 billion	2.51	$765.00 million	$1.50	15.18

Host Hotels & Resorts has higher revenue and earnings than American Hotel Income Properties REIT. American Hotel Income Properties REIT is trading at a lower price-to-earnings ratio than Host Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Hotel Income Properties REIT and Host Hotels & Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Hotel Income Properties REIT	N/A	N/A	N/A
Host Hotels & Resorts	16.51%	15.53%	7.83%

Dividends

American Hotel Income Properties REIT pays an annual dividend of $0.76 per share and has a dividend yield of 199.1%. Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. American Hotel Income Properties REIT pays out 1,245.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts pays out 53.3% of its earnings in the form of a dividend. Host Hotels & Resorts has increased its dividend for 2 consecutive years.

Summary

Host Hotels & Resorts beats American Hotel Income Properties REIT on 14 of the 15 factors compared between the two stocks.

About American Hotel Income Properties REIT

American Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), or AHIP, is a limited partnership formed to invest in hotel real estate properties across the United States. AHIP’s portfolio of premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. AHIP’s long-term objectives are to build on its proven track record of successful investment, deliver monthly U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil, and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.