Ashford Hospitality Trust (NYSE: AHT) and Hersha Hospitality Trust (NYSE:HT) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.
Institutional & Insider Ownership
70.3% of Ashford Hospitality Trust shares are held by institutional investors. Comparatively, 98.4% of Hersha Hospitality Trust shares are held by institutional investors. 18.2% of Ashford Hospitality Trust shares are held by insiders. Comparatively, 8.1% of Hersha Hospitality Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a breakdown of recent ratings and target prices for Ashford Hospitality Trust and Hersha Hospitality Trust, 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|
|Hersha Hospitality Trust||1||4||3||0||2.25|
Ashford Hospitality Trust currently has a consensus target price of $7.46, indicating a potential upside of 15.81%. Hersha Hospitality Trust has a consensus target price of $19.75, indicating a potential upside of 7.51%. Given Ashford Hospitality Trust’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ashford Hospitality Trust is more favorable than Hersha Hospitality Trust.
This table compares Ashford Hospitality Trust and Hersha Hospitality Trust’s 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%|
|Hersha Hospitality Trust||22.77%||14.78%||6.13%|
Ashford Hospitality Trust pays an annual dividend of $0.48 per share and has a dividend yield of 7.5%. Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.1%. Ashford Hospitality Trust pays out -35.8% of its earnings in the form of a dividend. Hersha Hospitality Trust pays out 48.7% 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. Hersha Hospitality Trust has increased its dividend for 3 consecutive years. Ashford Hospitality Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Ashford Hospitality Trust has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Hersha Hospitality Trust has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.
Earnings and Valuation
This table compares Ashford Hospitality Trust and Hersha Hospitality Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ashford Hospitality Trust||$1.45 billion||0.43||$394.52 million||($1.34)||-4.81|
|Hersha Hospitality Trust||$471.75 million||1.63||$138.69 million||$2.30||7.99|
Ashford Hospitality Trust has higher revenue and earnings than Hersha Hospitality Trust. Ashford Hospitality Trust is trading at a lower price-to-earnings ratio than Hersha Hospitality Trust, indicating that it is currently the more affordable of the two stocks.
About Ashford Hospitality Trust
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.
About Hersha Hospitality Trust
Hersha Hospitality Trust is a self-advised real estate investment trust (REIT). The Company invests primarily in institutional grade hotels in urban gateway markets, including New York, Washington, District of Columbia, Boston, Philadelphia, South Florida and select markets on the West Coast. As of July 20, 2017, the Company’s hotels included 51 hotels totaling 7,804 rooms located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company’s property brands include Marriott International, Hilton Hotels, Hyatt Hotels, Intercontinental Hotel Group, Wyndham Hotels and Hersha’s Independent Hotel Collection.
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