Analyzing Sotherly Hotels (NASDAQ:SOHOO) and DiamondRock Hospitality (NYSE:DRH)

Sotherly Hotels (NASDAQ:SOHOO) and DiamondRock Hospitality (NYSE:DRH) are both real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Earnings and Valuation

This table compares Sotherly Hotels and DiamondRock Hospitality”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$176.39 million	N/A	N/A	N/A	N/A
DiamondRock Hospitality	$1.14 billion	2.26	$48.05 million	$0.73	17.16

DiamondRock Hospitality has higher revenue and earnings than Sotherly Hotels.

Profitability

This table compares Sotherly Hotels and DiamondRock Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	N/A	N/A	N/A
DiamondRock Hospitality	5.69%	4.04%	2.05%

Analyst Recommendations

This is a summary of current ratings and price targets for Sotherly Hotels and DiamondRock Hospitality, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	0	0	0	0.00
DiamondRock Hospitality	0	7	4	0	2.36

DiamondRock Hospitality has a consensus price target of $12.22, indicating a potential downside of 2.43%. Given DiamondRock Hospitality’s stronger consensus rating and higher probable upside, analysts plainly believe DiamondRock Hospitality is more favorable than Sotherly Hotels.

Dividends

Sotherly Hotels pays an annual dividend of $1.97 per share and has a dividend yield of 60.1%. DiamondRock Hospitality pays an annual dividend of $0.44 per share and has a dividend yield of 3.5%. DiamondRock Hospitality pays out 60.3% of its earnings in the form of a dividend. DiamondRock Hospitality has increased its dividend for 1 consecutive years.

Summary

DiamondRock Hospitality beats Sotherly Hotels on 8 of the 10 factors compared between the two stocks.

About Sotherly Hotels

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.