Xenia Hotels & Resorts (NYSE:XHR) vs. Sunstone Hotel Investors (NYSE:SHO) Critical Survey

Xenia Hotels & Resorts (NYSE:XHR) and Sunstone Hotel Investors (NYSE:SHO) are both real estate companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Risk & Volatility

Xenia Hotels & Resorts has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, Sunstone Hotel Investors has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Xenia Hotels & Resorts and Sunstone Hotel Investors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xenia Hotels & Resorts	0	2	2	0	2.50
Sunstone Hotel Investors	1	6	1	1	2.22

Xenia Hotels & Resorts currently has a consensus price target of $20.12, indicating a potential downside of 4.08%. Sunstone Hotel Investors has a consensus price target of $11.43, indicating a potential downside of 11.23%. Given Xenia Hotels & Resorts’ stronger consensus rating and higher possible upside, equities analysts plainly believe Xenia Hotels & Resorts is more favorable than Sunstone Hotel Investors.

Dividends

Xenia Hotels & Resorts pays an annual dividend of $0.56 per share and has a dividend yield of 2.7%. Sunstone Hotel Investors pays an annual dividend of $0.36 per share and has a dividend yield of 2.8%. Xenia Hotels & Resorts pays out -800.0% of its earnings in the form of a dividend. Sunstone Hotel Investors pays out 163.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Xenia Hotels & Resorts has raised its dividend for 3 consecutive years and Sunstone Hotel Investors has raised its dividend for 2 consecutive years.

Earnings and Valuation

This table compares Xenia Hotels & Resorts and Sunstone Hotel Investors”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xenia Hotels & Resorts	$1.08 billion	1.79	$63.09 million	($0.07)	-299.73
Sunstone Hotel Investors	$1.00 billion	2.39	$24.57 million	$0.22	58.52

Xenia Hotels & Resorts has higher revenue and earnings than Sunstone Hotel Investors. Xenia Hotels & Resorts is trading at a lower price-to-earnings ratio than Sunstone Hotel Investors, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Xenia Hotels & Resorts and Sunstone Hotel Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xenia Hotels & Resorts	-0.66%	-0.61%	-0.26%
Sunstone Hotel Investors	5.30%	3.21%	1.75%

Insider & Institutional Ownership

92.4% of Xenia Hotels & Resorts shares are owned by institutional investors. Comparatively, 99.4% of Sunstone Hotel Investors shares are owned by institutional investors. 4.4% of Xenia Hotels & Resorts shares are owned by company insiders. Comparatively, 1.4% of Sunstone Hotel Investors shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

About Xenia Hotels & Resorts

Xenia Hotels & Resorts, Inc. is a real estate investment trust, which engages in the provision of investment in luxury and upper upscale hotels and resorts. It also owns a diversified portfolio of lodging properties operated by Marriott, Kimpton, Hyatt, Aston, Fairmong, and Loews. The company was founded in 2007 and is headquartered in Orlando, FL.

About Sunstone Hotel Investors

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 14 hotels comprised of 6,675 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate.