Summit Hotel Properties (NYSE: INN) and Strategic Hotels and Resorts (NYSE:BEE) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Summit Hotel Properties and Strategic Hotels and Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Hotel Properties 21.97% 9.89% 5.83%
Strategic Hotels and Resorts 6.40% 5.76% 2.43%

Dividends

Summit Hotel Properties pays an annual dividend of $0.68 per share and has a dividend yield of 4.4%. Strategic Hotels and Resorts does not pay a dividend. Summit Hotel Properties pays out 75.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Strategic Hotels and Resorts has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Summit Hotel Properties and Strategic Hotels and Resorts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Summit Hotel Properties $475.70 million 3.37 $154.58 million $0.90 17.07
Strategic Hotels and Resorts N/A N/A N/A N/A N/A

Summit Hotel Properties has higher revenue and earnings than Strategic Hotels and Resorts.

Analyst Ratings

This is a summary of current ratings and target prices for Summit Hotel Properties and Strategic Hotels and Resorts, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Hotel Properties 1 2 5 0 2.50
Strategic Hotels and Resorts 0 0 0 0 N/A

Summit Hotel Properties presently has a consensus price target of $17.50, indicating a potential upside of 13.93%. Given Summit Hotel Properties’ higher probable upside, research analysts clearly believe Summit Hotel Properties is more favorable than Strategic Hotels and Resorts.

Institutional and Insider Ownership

95.3% of Summit Hotel Properties shares are owned by institutional investors. 1.7% of Summit Hotel Properties shares are owned by company 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.

Summary

Summit Hotel Properties beats Strategic Hotels and Resorts on 9 of the 12 factors compared between the two stocks.

About Summit Hotel Properties

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 79 hotels with a total of 11,590 guestrooms located in 24 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 92% 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.

About Strategic Hotels and Resorts

Strategic Hotels & Resorts, Inc. (SHR) is a self-administered and self-managed real estate investment trust (REIT). The Company acquires and asset manages hotels. The Company owns land held for development including 50.7 acres of oceanfront land in Nayarit, Mexico; 13.8 acres of land in Scottsdale, Arizona adjacent to its Four Seasons Resort Scottsdale at Troon North, and a 20,000 square-foot oceanfront land parcel in Santa Monica, California adjacent to its Loews Santa Monica Beach Hotel. The Company’s hotels are operated under the brands of Fairmont, Four Seasons, Hyatt, InterContinental, JW Marriott, Loews, Marriott, Montage, Ritz-Carlton and Westin. The Hotel del Coronado is operated by a specialty management company, KSL Resorts.

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