Head to Head Survey: Summit Hotel Properties (INN) vs. Pebblebrook Hotel Trust (PEB)

Summit Hotel Properties (NYSE: INN) and Pebblebrook Hotel Trust (NYSE:PEB) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.

Dividends

Summit Hotel Properties pays an annual dividend of $0.68 per share and has a dividend yield of 4.6%. Pebblebrook Hotel Trust pays an annual dividend of $1.52 per share and has a dividend yield of 4.2%. Summit Hotel Properties pays out 82.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pebblebrook Hotel Trust pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Hotel Properties has increased its dividend for 5 consecutive years and Pebblebrook Hotel Trust has increased its dividend for 4 consecutive years. Summit Hotel Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Summit Hotel Properties and Pebblebrook Hotel Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Hotel Properties 20.21% 8.96% 5.28%
Pebblebrook Hotel Trust 12.98% 6.63% 3.78%

Valuation and Earnings

This table compares Summit Hotel Properties and Pebblebrook Hotel Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit Hotel Properties $473.93 million 3.22 $107.80 million $0.82 17.84
Pebblebrook Hotel Trust $816.42 million 3.07 $73.70 million $1.28 28.45

Summit Hotel Properties has higher earnings, but lower revenue than Pebblebrook Hotel Trust. Summit Hotel Properties 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Summit Hotel Properties and Pebblebrook Hotel Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Hotel Properties 1 1 7 0 2.67
Pebblebrook Hotel Trust 2 3 5 0 2.30

Summit Hotel Properties currently has a consensus price target of $17.19, indicating a potential upside of 17.48%. Pebblebrook Hotel Trust has a consensus price target of $36.19, indicating a potential downside of 0.61%. Given Summit Hotel Properties’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Summit Hotel Properties is more favorable than Pebblebrook Hotel Trust.

Insider and Institutional Ownership

96.1% of Summit Hotel Properties shares are held by institutional investors. 1.7% of Summit Hotel Properties shares are held by company insiders. Comparatively, 2.0% of Pebblebrook Hotel Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Summit Hotel Properties has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, Pebblebrook Hotel Trust has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Summary

Summit Hotel Properties beats Pebblebrook Hotel Trust on 13 of the 17 factors compared between the two stocks.

Summit Hotel Properties Company Profile

Summit Hotel Properties, Inc. is a real estate investment trust (REIT). The Company is focused primarily on owning premium-branded, select-service hotels in the Upscale segment of the United States lodging industry. The Company’s portfolio consists of 83 hotels with a total of 12,242 guestrooms located in 26 states. The Company’s hotels are located in markets, such as business and corporate headquarters, retail centers, airports and tourist attractions. The Company’s portfolio is located in urban and suburban markets. Based on total number of guestrooms, approximately 89% of the Company’s portfolio is positioned in over 50 metropolitan statistical areas (MSAs), and approximately 96% is located within over 100 MSAs. Based on total number of guestrooms, approximately 99% of the Company’s hotels operate under franchise brands owned by Marriott International, Inc., Hilton Worldwide, InterContinental Hotels Group, and an affiliate of Hyatt Hotels Corporation.

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).

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