Analyzing Ashford Hospitality Prime (AHP) and Park Hotels & Resorts (PK)

Ashford Hospitality Prime (NYSE: AHP) and Park Hotels & Resorts (NYSE:PK) are both financials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.

Valuation & Earnings

This table compares Ashford Hospitality Prime and Park Hotels & Resorts’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ashford Hospitality Prime $405.86 million 0.77 $19.31 million ($0.25) -38.68
Park Hotels & Resorts $2.73 billion 2.27 $133.00 million $12.01 2.40

Park Hotels & Resorts has higher revenue and earnings than Ashford Hospitality Prime. Ashford Hospitality Prime is trading at a lower price-to-earnings ratio than Park Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Dividends

Ashford Hospitality Prime pays an annual dividend of $0.64 per share and has a dividend yield of 6.6%. Park Hotels & Resorts pays an annual dividend of $2.20 per share and has a dividend yield of 7.6%. Ashford Hospitality Prime pays out -256.0% of its earnings in the form of a dividend. Park Hotels & Resorts pays out 18.3% 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. Park Hotels & Resorts has raised its dividend for 3 consecutive years. Park Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Ashford Hospitality Prime and Park Hotels & Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ashford Hospitality Prime -0.36% -0.43% -0.10%
Park Hotels & Resorts 93.04% 46.66% 25.91%

Insider and Institutional Ownership

64.6% of Ashford Hospitality Prime shares are owned by institutional investors. Comparatively, 99.1% of Park Hotels & Resorts shares are owned by institutional investors. 10.0% of Ashford Hospitality Prime shares are owned by company insiders. Comparatively, 0.3% of Park Hotels & Resorts shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Ashford Hospitality Prime and Park Hotels & Resorts, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ashford Hospitality Prime 0 3 4 0 2.57
Park Hotels & Resorts 0 6 8 0 2.57

Ashford Hospitality Prime currently has a consensus price target of $13.40, indicating a potential upside of 38.57%. Park Hotels & Resorts has a consensus price target of $36.64, indicating a potential upside of 27.03%. Given Ashford Hospitality Prime’s higher possible upside, analysts clearly believe Ashford Hospitality Prime is more favorable than Park Hotels & Resorts.

Summary

Park Hotels & Resorts beats Ashford Hospitality Prime on 12 of the 15 factors compared between the two stocks.

Ashford Hospitality Prime Company Profile

Ashford Hospitality Prime, Inc. invests in high revenue per available room (RevPAR), luxury hotels and resorts. The Company conducts its business and owns all of its assets through its operating partnership, Ashford Hospitality Prime Limited Partnership (Ashford Prime OP). The Company operates in the direct hotel investment segment of the hotel lodging industry. As of February 24, 2017, it owned interests in 11 hotel properties in six states, the District of Columbia and St. Thomas, the United States Virgin Islands with 3,702 total rooms, or 3,467 net rooms, excluding those attributable to its joint venture partner. The hotel properties in its portfolio are mainly located in the Unites States urban markets. The Company owns nine of its hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated entity. All of the hotels in the Company’s portfolio are asset-managed by Ashford Hospitality Advisors LLC.

Park Hotels & Resorts Company Profile

Park Hotels & Resorts Inc. is a lodging real estate company. The Company has a portfolio of hotels and resorts. The Company operates through ownership segment, which includes all of its hotel properties. As of December 31, 2016, the Company’s portfolio consisted of 67 hotels and resorts with over 35,000 rooms located in the United States and international markets. Its portfolio includes hotels in areas, such as New York City, Washington, D.C., Chicago, San Francisco and London; resorts in leisure destinations, including Hawaii, Orlando and Key West, and a range of properties adjacent to gateway airports, such as Los Angeles International, Chicago O’Hare, Boston Logan and Miami Airport, and select suburban locations. The Company’s brand affiliations include Conrad Hotels & Resorts, DoubleTree by Hilton, Embassy Suites by Hilton, Hampton by Hilton, Hilton Hotels & Resorts, Hilaton Garden Inn, Curio – A Collection by Hilton, and Waldorf Astoria Hotels & Resorts.

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