Chatham Lodging Trust (NYSE:CLDT) and National Retail Properties (NYSE:NNN) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.

Dividends

Chatham Lodging Trust pays an annual dividend of $1.32 per share and has a dividend yield of 6.7%. National Retail Properties pays an annual dividend of $2.00 per share and has a dividend yield of 4.4%. Chatham Lodging Trust pays out 61.7% of its earnings in the form of a dividend. National Retail Properties pays out 78.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust has increased its dividend for 3 consecutive years and National Retail Properties has increased its dividend for 8 consecutive years. Chatham Lodging Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Chatham Lodging Trust has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, National Retail Properties has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500.

Insider and Institutional Ownership

82.5% of Chatham Lodging Trust shares are held by institutional investors. Comparatively, 90.9% of National Retail Properties shares are held by institutional investors. 3.4% of Chatham Lodging Trust shares are held by company insiders. Comparatively, 1.0% of National Retail Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Chatham Lodging Trust and National Retail Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chatham Lodging Trust 11.54% 4.61% 2.62%
National Retail Properties 50.66% 9.50% 4.62%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Chatham Lodging Trust and National Retail Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chatham Lodging Trust 0 4 0 0 2.00
National Retail Properties 1 3 5 0 2.44

Chatham Lodging Trust presently has a consensus target price of $20.75, indicating a potential upside of 5.87%. National Retail Properties has a consensus target price of $46.43, indicating a potential upside of 1.46%. Given Chatham Lodging Trust’s higher probable upside, research analysts plainly believe Chatham Lodging Trust is more favorable than National Retail Properties.

Earnings and Valuation

This table compares Chatham Lodging Trust and National Retail Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chatham Lodging Trust $298.86 million 3.01 $29.47 million $2.14 9.16
National Retail Properties $584.93 million 12.28 $264.97 million $2.54 18.02

National Retail Properties has higher revenue and earnings than Chatham Lodging Trust. Chatham Lodging Trust is trading at a lower price-to-earnings ratio than National Retail Properties, indicating that it is currently the more affordable of the two stocks.

Summary

National Retail Properties beats Chatham Lodging Trust on 12 of the 17 factors compared between the two stocks.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly-traded real estate investment trust focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns interests in 135 hotels totaling 18,518 rooms/suites, comprised of 40 properties it wholly owns with an aggregate of 6,020 rooms/suites in 15 states and the District of Columbia and a minority investment in two joint ventures that own 95 hotels with an aggregate of 12,498 rooms/suites.

About National Retail Properties

National Retail Properties invests primarily in high-quality retail properties subject generally to long term, net leases. As of June 30, 2018, the company owned 2,846 properties in 48 states with a gross leasable area of approximately 29.4 million square feet and with a weighted average remaining lease term of 11.5 years.

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