RLJ Lodging Trust (NYSE: RLJ) and FelCor Lodging Trust (NYSE:FCH) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Dividends

RLJ Lodging Trust pays an annual dividend of $0.44 per share and has a dividend yield of 2.0%. FelCor Lodging Trust pays an annual dividend of $0.24 per share and has a dividend yield of 3.3%. RLJ Lodging Trust pays out 30.3% of its earnings in the form of a dividend. FelCor Lodging Trust pays out -49.0% 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. RLJ Lodging Trust has raised its dividend for 6 consecutive years and FelCor Lodging Trust has raised its dividend for 2 consecutive years. FelCor Lodging Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

RLJ Lodging Trust has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, FelCor Lodging Trust has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for RLJ Lodging Trust and FelCor Lodging Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RLJ Lodging Trust 1 4 6 0 2.45
FelCor Lodging Trust 0 2 0 0 2.00

RLJ Lodging Trust presently has a consensus target price of $24.18, indicating a potential upside of 10.12%. FelCor Lodging Trust has a consensus target price of $7.00, indicating a potential downside of 4.11%. Given RLJ Lodging Trust’s stronger consensus rating and higher probable upside, research analysts clearly believe RLJ Lodging Trust is more favorable than FelCor Lodging Trust.

Earnings & Valuation

This table compares RLJ Lodging Trust and FelCor Lodging Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RLJ Lodging Trust $1.12 billion 2.43 $355.90 million $1.45 15.14
FelCor Lodging Trust $828.93 million 1.22 $207.52 million ($0.49) -14.90

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

Insider & Institutional Ownership

78.8% of FelCor Lodging Trust shares are held by institutional investors. 2.3% of RLJ Lodging Trust shares are held by insiders. Comparatively, 3.3% of FelCor Lodging Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares RLJ Lodging Trust and FelCor Lodging Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RLJ Lodging Trust 16.12% 8.16% 4.52%
FelCor Lodging Trust -0.66% N/A -0.35%

Summary

RLJ Lodging Trust beats FelCor Lodging Trust on 11 of the 16 factors compared between the two stocks.

RLJ Lodging Trust Company Profile

RLJ Lodging Trust is a self-administered real estate investment trust. The Company is engaged in the acquisition of focused-service and compact full-service hotels. As of December 31, 2016, the Company owned 122 hotels with approximately 20,100 rooms, located in 21 states and the District of Columbia, and an interest in one mortgage loan secured by a hotel. Its hotels’ brand affiliations include Residence Inn, Courtyard, SpringHill Suites, Fairfield Inn & Suites, Marriott, Renaissance, Hilton Garden Inn, Hampton Inn/Hampton Inn & Suites, Embassy Suites, DoubleTree, Homewood Suites, Hilton, Hyatt House, Hyatt Place and Hyatt/Hyatt Centric. Its operating partnership is RLJ Lodging Trust, L.P. Its properties include Courtyard San Francisco, Courtyard Boulder Longmont, Residence Inn Longmont Boulder, DoubleTree Grand Key Resort, Courtyard Atlanta Buckhead, Courtyard Chicago Southeast Hammond, Courtyard Louisville Northeast, DoubleTree Hotel Columbia and Residence Inn Detroit Novi.

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.

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