Pebblebrook Hotel Trust (NYSE: PEB) and Diamondrock Hospitality Company (NYSE:DRH) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitabiliy, valuation and earnings.
This is a breakdown of recent recommendations and price targets for Pebblebrook Hotel Trust and Diamondrock Hospitality Company, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pebblebrook Hotel Trust||1||6||1||0||2.00|
|Diamondrock Hospitality Company||3||5||3||0||2.00|
Pebblebrook Hotel Trust presently has a consensus price target of $29.00, suggesting a potential downside of 13.51%. Diamondrock Hospitality Company has a consensus price target of $11.08, suggesting a potential downside of 5.02%. Given Diamondrock Hospitality Company’s higher probable upside, analysts clearly believe Diamondrock Hospitality Company is more favorable than Pebblebrook Hotel Trust.
Pebblebrook Hotel Trust pays an annual dividend of $1.52 per share and has a dividend yield of 4.5%. Diamondrock Hospitality Company pays an annual dividend of $0.50 per share and has a dividend yield of 4.3%. Pebblebrook Hotel Trust pays out 220.3% 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 Company pays out 94.3% 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 Company has raised its dividend for 4 consecutive years.
Risk and Volatility
Pebblebrook Hotel Trust has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Diamondrock Hospitality Company has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.
Valuation and Earnings
This table compares Pebblebrook Hotel Trust and Diamondrock Hospitality Company’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pebblebrook Hotel Trust||$805.01 million||2.90||$249.36 million||$0.69||48.59|
|Diamondrock Hospitality Company||$879.73 million||2.65||$248.98 million||$0.53||22.00|
Pebblebrook Hotel Trust has higher revenue, but lower earnings than Diamondrock Hospitality Company. Diamondrock Hospitality Company is trading at a lower price-to-earnings ratio than Pebblebrook Hotel Trust, indicating that it is currently the more affordable of the two stocks.
This table compares Pebblebrook Hotel Trust and Diamondrock Hospitality Company’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pebblebrook Hotel Trust||8.87%||4.38%||2.46%|
|Diamondrock Hospitality Company||12.15%||5.83%||3.48%|
Diamondrock Hospitality Company beats Pebblebrook Hotel Trust on 9 of the 14 factors compared between the two stocks.
Pebblebrook Hotel Trust Company Profile
Pebblebrook Hotel Trust is an internally managed hotel investment company. The Company is a real estate investment trust (REIT) that acquires and invests in hotel properties located primarily in cities of the United States. As of December 31, 2016, the Company owned 29 hotels with a total of 7,219 guest rooms. The hotels are located in the markets: Atlanta (Buckhead), Georgia; Boston, Massachusetts; Miami (Coral Gables), Florida; Minneapolis, Minnesota; Naples, Florida; Nashville, Tennessee; New York, New York; Philadelphia, Pennsylvania; Portland, Oregon; San Diego, California; San Francisco, California; Santa Monica, California; Seattle, Washington; Stevenson, Washington; Washington, D.C.; West Hollywood, California, and Los Angeles (Beverly Hills), California. The Company’s assets are held by, and all of the operations are conducted through, Pebblebrook Hotel, L.P. (the Operating Partnership).
Diamondrock Hospitality Company 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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