Xenia Hotels & Resorts (NYSE: XHR) and Sotherly Hotels (NASDAQ:SOHO) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Valuation & Earnings

This table compares Xenia Hotels & Resorts and Sotherly Hotels’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Xenia Hotels & Resorts $950.16 million 2.45 $85.85 million $1.27 17.19
Sotherly Hotels $152.85 million 0.61 $920,000.00 ($0.01) -677.32

Xenia Hotels & Resorts has higher revenue and earnings than Sotherly Hotels. Sotherly Hotels is trading at a lower price-to-earnings ratio than Xenia Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Dividends

Xenia Hotels & Resorts pays an annual dividend of $1.10 per share and has a dividend yield of 5.0%. Sotherly Hotels pays an annual dividend of $0.44 per share and has a dividend yield of 6.5%. Xenia Hotels & Resorts pays out 86.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sotherly Hotels pays out -4,395.6% of its earnings in the form of a dividend. Sotherly Hotels is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

68.1% of Xenia Hotels & Resorts shares are held by institutional investors. Comparatively, 27.3% of Sotherly Hotels shares are held by institutional investors. 0.5% of Xenia Hotels & Resorts shares are held by company insiders. Comparatively, 13.8% of Sotherly Hotels shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Xenia Hotels & Resorts and Sotherly Hotels’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xenia Hotels & Resorts 15.23% 8.34% 4.73%
Sotherly Hotels 2.01% 3.98% 0.75%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Xenia Hotels & Resorts and Sotherly Hotels, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xenia Hotels & Resorts 0 3 3 0 2.50
Sotherly Hotels 0 1 1 0 2.50

Xenia Hotels & Resorts currently has a consensus price target of $21.50, indicating a potential downside of 1.51%. Sotherly Hotels has a consensus price target of $8.00, indicating a potential upside of 17.99%. Given Sotherly Hotels’ higher probable upside, analysts clearly believe Sotherly Hotels is more favorable than Xenia Hotels & Resorts.

Volatility and Risk

Xenia Hotels & Resorts has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Sotherly Hotels has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Summary

Xenia Hotels & Resorts beats Sotherly Hotels on 11 of the 15 factors compared between the two stocks.

Xenia Hotels & Resorts Company Profile

Xenia Hotels & Resorts, Inc. (Xenia) is a self-advised and self-administered real estate investment trust (REIT). The Company invests in premium full service, lifestyle and urban upscale hotels, with a focus on var ious markets, as well as leisure destinations in the United States. As of October 4, 2017, the Company owned 39 hotels, 37 of which are completely owned, comprising 11,533 rooms, across 18 states and the District of Columbia, including a majority interest in two hotels owned through two investments in real estate entities. The Company’s hotels are primarily operated and/or licensed by Marriott, Kimpton, Hyatt, Aston, Fairmont, Hilton and Loews, as well as independent management companies. As of May 30, 2017, the Company’s portfolio included Andaz Napa, Andaz San Diego, Andaz Savannah, Aston Waikiki Beach Hotel, Bohemian Hotel Celebration, (an Autograph Collection Hotel) and Bohemian Hotel Savannah Riverfront, (an Autograph Collection Hotel).

Sotherly Hotels Company Profile

Sotherly Hotels Inc. is a self-managed and self-administered lodging real estate investment trust. The Company is focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the southern United States. The Company operates through the hotel ownership segment. The Company conducts its operations through Sotherly Hotels LP, its Operating Partnership, of which the Company is the general partner. Its portfolio consists of approximately 10 full-service, mainly upscale and upper-upscale hotels located in over eight states with an aggregate of approximately 3,010 rooms and approximately 160,930 square feet of meeting space. All of these hotels are owned by subsidiaries of the Operating Partnership, approximately 10 operate under the Hilton, Crowne Plaza, DoubleTree and Sheraton brands, one is an independent hotel, and all are managed on a day to day basis by MHI Hotels Services, LLC, which does business as Chesapeake Hospitality.

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