Reviewing Ashford Hospitality Trust (AHT) and Sunstone Hotel Investors (SHO)
Ashford Hospitality Trust (NYSE: AHT) and Sunstone Hotel Investors (NYSE:SHO) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.
Insider and Institutional Ownership
70.3% of Ashford Hospitality Trust shares are owned by institutional investors. 18.2% of Ashford Hospitality Trust shares are owned by insiders. Comparatively, 0.8% of Sunstone Hotel Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a summary of recent recommendations for Ashford Hospitality Trust and Sunstone Hotel Investors, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ashford Hospitality Trust||0||3||3||0||2.50|
|Sunstone Hotel Investors||3||5||2||0||1.90|
Ashford Hospitality Trust currently has a consensus target price of $7.46, suggesting a potential upside of 19.14%. Sunstone Hotel Investors has a consensus target price of $15.56, suggesting a potential downside of 2.10%. Given Ashford Hospitality Trust’s stronger consensus rating and higher possible upside, research analysts plainly believe Ashford Hospitality Trust is more favorable than Sunstone Hotel Investors.
Volatility and Risk
Ashford Hospitality Trust has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, Sunstone Hotel Investors has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.
Ashford Hospitality Trust pays an annual dividend of $0.48 per share and has a dividend yield of 7.7%. Sunstone Hotel Investors pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Ashford Hospitality Trust pays out -35.8% of its earnings in the form of a dividend. Sunstone Hotel Investors pays out 25.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ashford Hospitality Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Ashford Hospitality Trust and Sunstone Hotel Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ashford Hospitality Trust||-5.43%||-10.41%||-1.64%|
|Sunstone Hotel Investors||15.41%||7.70%||4.91%|
Valuation & Earnings
This table compares Ashford Hospitality Trust and Sunstone Hotel Investors’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ashford Hospitality Trust||$1.45 billion||0.42||$394.52 million||($1.34)||-4.67|
|Sunstone Hotel Investors||$1.19 billion||3.01||$344.05 million||$0.78||20.37|
Ashford Hospitality Trust has higher revenue and earnings than Sunstone Hotel Investors. Ashford Hospitality Trust 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.
Ashford Hospitality Trust beats Sunstone Hotel Investors on 10 of the 16 factors compared between the two stocks.
Ashford Hospitality Trust Company Profile
Ashford Hospitality Trust, Inc. is an externally-advised real estate investment trust (REIT). The Company is focused on investing in the hospitality industry with a focus on full-service upscale and upper-upscale hotels in the United States. The Company owns its lodging investments and conducts its business through Ashford Hospitality Limited Partnership (Ashford Trust OP), its operating partnership. The Company’s portfolio consists of 121 properties with over 25000 rooms; 86 hotel condominium units at WorldQuest Resort in Orlando, Florida; a 96.6% ownership in Ashford Quantitative Alternatives (U.S.), LP (the AQUA U.S. Fund); a 29.7% ownership in Ashford Inc., and a 13.3% ownership in OpenKey.
Sunstone Hotel Investors Company Profile
Sunstone Hotel Investors, Inc. operates as a self-managed and self-administered real estate investment trust. The Company’s primary business is to acquire, own, asset manage and renovate primarily urban and resort upper upscale hotels in the United States. It operates through hotel ownership segment. It owns primarily urban and resort upper upscale hotels in the United States. The Company’s hotels are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt. As of July 26, 2017 the Company has interest in 27 hotels, including 13,202 rooms. The Company’s hotels are located in gateway markets, such as Boston, New York, Washington, District of Columbia (DC)/Baltimore, Chicago, Orlando, New Orleans, San Francisco, Los Angeles, Orange County and San Diego.
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