Contrasting Host Hotels & Resorts (NASDAQ:HST) and Global Net Lease (NYSE:GNL)

Host Hotels & Resorts (NASDAQ:HST) and Global Net Lease (NYSE:GNL) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Volatility and Risk

Host Hotels & Resorts has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Global Net Lease has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Host Hotels & Resorts and Global Net Lease, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Host Hotels & Resorts	0	6	10	1	2.71
Global Net Lease	0	1	4	1	3.00

Host Hotels & Resorts presently has a consensus target price of $23.95, suggesting a potential downside of 2.55%. Global Net Lease has a consensus target price of $10.40, suggesting a potential upside of 13.23%. Given Global Net Lease’s stronger consensus rating and higher possible upside, analysts clearly believe Global Net Lease is more favorable than Host Hotels & Resorts.

Profitability

This table compares Host Hotels & Resorts and Global Net Lease’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Host Hotels & Resorts	16.40%	15.15%	7.75%
Global Net Lease	-8.72%	-2.90%	-1.07%

Dividends

Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 3.3%. Global Net Lease pays an annual dividend of $0.76 per share and has a dividend yield of 8.3%. Host Hotels & Resorts pays out 54.4% of its earnings in the form of a dividend. Global Net Lease pays out -190.0% 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. Host Hotels & Resorts has raised its dividend for 2 consecutive years. Global Net Lease is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Host Hotels & Resorts and Global Net Lease”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Host Hotels & Resorts	$6.11 billion	2.75	$765.00 million	$1.47	16.72
Global Net Lease	$495.29 million	3.93	-$225.46 million	($0.40)	-22.96

Host Hotels & Resorts has higher revenue and earnings than Global Net Lease. Global Net Lease is trading at a lower price-to-earnings ratio than Host Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

98.5% of Host Hotels & Resorts shares are held by institutional investors. Comparatively, 61.2% of Global Net Lease shares are held by institutional investors. 1.5% of Host Hotels & Resorts shares are held by company insiders. Comparatively, 0.6% of Global Net Lease shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Host Hotels & Resorts beats Global Net Lease on 12 of the 17 factors compared between the two stocks.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil, and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.

About Global Net Lease

Global Net Lease, Inc. (NYSE: GNL) is a publicly traded real estate investment trust listed on the NYSE. The firm focused on acquiring a diversified global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States, Western and Northern Europe.