DiamondRock Hospitality (NYSE:DRH) and American Hotel Income Properties REIT (OTCMKTS:AHOTF) Critical Analysis

DiamondRock Hospitality (NYSE:DRH) and American Hotel Income Properties REIT (OTCMKTS:AHOTF) are both real estate companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Analyst Ratings

This is a summary of current ratings for DiamondRock Hospitality and American Hotel Income Properties REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DiamondRock Hospitality	0	7	4	0	2.36
American Hotel Income Properties REIT	0	0	0	0	0.00

DiamondRock Hospitality currently has a consensus price target of $12.22, indicating a potential downside of 3.28%. Given DiamondRock Hospitality’s stronger consensus rating and higher possible upside, equities analysts plainly believe DiamondRock Hospitality is more favorable than American Hotel Income Properties REIT.

Earnings and Valuation

This table compares DiamondRock Hospitality and American Hotel Income Properties REIT”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DiamondRock Hospitality	$1.14 billion	2.27	$48.05 million	$0.73	17.32
American Hotel Income Properties REIT	N/A	N/A	N/A	$0.06	6.25

DiamondRock Hospitality has higher revenue and earnings than American Hotel Income Properties REIT. American Hotel Income Properties REIT is trading at a lower price-to-earnings ratio than DiamondRock Hospitality, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

10.3% of American Hotel Income Properties REIT shares are held by institutional investors. 0.9% of DiamondRock Hospitality shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

DiamondRock Hospitality pays an annual dividend of $0.44 per share and has a dividend yield of 3.5%. American Hotel Income Properties REIT pays an annual dividend of $0.76 per share and has a dividend yield of 199.1%. DiamondRock Hospitality pays out 60.3% of its earnings in the form of a dividend. American Hotel Income Properties REIT pays out 1,245.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DiamondRock Hospitality has raised its dividend for 1 consecutive years.

Profitability

This table compares DiamondRock Hospitality and American Hotel Income Properties REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DiamondRock Hospitality	5.69%	4.04%	2.05%
American Hotel Income Properties REIT	N/A	N/A	N/A

Summary

DiamondRock Hospitality beats American Hotel Income Properties REIT on 12 of the 14 factors compared between the two stocks.

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.

About American Hotel Income Properties REIT

American Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), or AHIP, is a limited partnership formed to invest in hotel real estate properties across the United States. AHIP’s portfolio of premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. AHIP’s long-term objectives are to build on its proven track record of successful investment, deliver monthly U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio.