Reviewing FelCor Lodging Trust (FCH) and Diamondrock Hospitality (DRH)
FelCor Lodging Trust (NYSE: FCH) and Diamondrock Hospitality (NYSE:DRH) are both financials companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.
Volatility & Risk
FelCor Lodging Trust has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, Diamondrock Hospitality has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.
Insider & Institutional Ownership
78.8% of FelCor Lodging Trust shares are held by institutional investors. 3.3% of FelCor Lodging Trust shares are held by company insiders. Comparatively, 1.1% of Diamondrock Hospitality shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares FelCor Lodging Trust and Diamondrock Hospitality’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|FelCor Lodging Trust||$828.93 million||1.21||$207.52 million||($0.49)||-14.73|
|Diamondrock Hospitality||$866.34 million||2.55||$242.01 million||$0.49||22.49|
Diamondrock Hospitality has higher revenue and earnings than FelCor Lodging Trust. FelCor Lodging Trust is trading at a lower price-to-earnings ratio than Diamondrock Hospitality, indicating that it is currently the more affordable of the two stocks.
FelCor Lodging Trust pays an annual dividend of $0.24 per share and has a dividend yield of 3.3%. Diamondrock Hospitality pays an annual dividend of $0.50 per share and has a dividend yield of 4.5%. FelCor Lodging Trust pays out -49.0% of its earnings in the form of a dividend. Diamondrock Hospitality pays out 102.0% 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 has increased its dividend for 2 consecutive years. Diamondrock Hospitality is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and recommmendations for FelCor Lodging Trust and Diamondrock Hospitality, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|FelCor Lodging Trust||0||2||0||0||2.00|
FelCor Lodging Trust currently has a consensus price target of $7.00, suggesting a potential downside of 3.05%. Diamondrock Hospitality has a consensus price target of $12.00, suggesting a potential upside of 8.89%. Given Diamondrock Hospitality’s stronger consensus rating and higher possible upside, analysts clearly believe Diamondrock Hospitality is more favorable than FelCor Lodging Trust.
This table compares FelCor Lodging Trust and Diamondrock Hospitality’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|FelCor Lodging Trust||-0.66%||N/A||-0.35%|
Diamondrock Hospitality beats FelCor Lodging Trust on 12 of the 16 factors compared between the two stocks.
FelCor Lodging Trust Company Profile
FelCor Lodging Trust Incorporated is a real estate investment trust (REIT). The Company, through its subsidiary, FelCor Lodging Limited Partnership, held ownership interests in 39 hotels with 11,500 rooms, as of December 31, 2016. The Company sells, acquires, rebrands and redevelops hotels. As of December 31, 2016, the Company’s hotels were located in 14 states of the United States. The Company holds a portfolio of hotels managed by Hilton Worldwide (Hilton); Wyndham Worldwide (Wyndham); Marriott International Inc. (Marriott); InterContinental Hotels Group (IHG); AccorHotels Group, Highgate Hotels (Highgate), SBE and Aimbridge Hospitality. The Company’s hotels include Embassy Suites Atlanta-Buckhead; DoubleTree Suites by Hilton Austin; Embassy Suites Birmingham; The Fairmont Copley Plaza, Boston; Wyndham Boston Beacon Hill; Embassy Suites Boston-Marlborough, and Sheraton Burlington Hotel & Conference Center.
Diamondrock Hospitality Company Profile
DiamondRock Hospitality Company is a real estate investment trust (REIT). As of December 31, 2016, the Company owned a portfolio of 26 hotels and resorts that contains 9,472 guest rooms located in 17 different markets in North America and the United States Virgin Islands. Its business is to acquire, own, asset manage and renovate hotel properties in the United States. Its portfolio is concentrated in gateway cities and destination resort locations. It conducts its business through an umbrella partnership REIT (UPREIT) in, which its hotels are owned by subsidiaries of its operating partnership, DiamondRock Hospitality Limited Partnership. The Company is the general partner of its operating partnership and owns, either directly or indirectly, all of the limited partnership units of its operating partnership. The Company leases all of its domestic hotels to taxable REIT subsidiary, Bloodstone TRS, Inc. (TRS) lessees.
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