Apple Hospitality REIT (APLE) versus Hospitality Properties Trust (HPT) Head-To-Head Review

Apple Hospitality REIT (NYSE: APLE) and Hospitality Properties Trust (NASDAQ:HPT) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Dividends

Apple Hospitality REIT pays an annual dividend of $1.20 per share and has a dividend yield of 6.1%. Hospitality Properties Trust pays an annual dividend of $2.08 per share and has a dividend yield of 7.1%. Apple Hospitality REIT pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hospitality Properties Trust pays out 148.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hospitality Properties Trust has increased its dividend for 2 consecutive years. Hospitality Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Apple Hospitality REIT and Hospitality Properties Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apple Hospitality REIT $1.04 billion 4.19 $144.65 million $1.01 19.36
Hospitality Properties Trust $2.05 billion 2.34 $223.11 million $1.40 20.84

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

Risk and Volatility

Apple Hospitality REIT has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Hospitality Properties Trust has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Apple Hospitality REIT and Hospitality Properties Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apple Hospitality REIT 0 4 1 0 2.20
Hospitality Properties Trust 1 3 4 0 2.38

Apple Hospitality REIT currently has a consensus target price of $20.00, suggesting a potential upside of 2.30%. Hospitality Properties Trust has a consensus target price of $31.17, suggesting a potential upside of 6.81%. Given Hospitality Properties Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Hospitality Properties Trust is more favorable than Apple Hospitality REIT.

Profitability

This table compares Apple Hospitality REIT and Hospitality Properties Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apple Hospitality REIT 18.37% 6.46% 4.58%
Hospitality Properties Trust 11.66% 8.79% 3.58%

Insider and Institutional Ownership

50.9% of Apple Hospitality REIT shares are held by institutional investors. Comparatively, 75.6% of Hospitality Properties Trust shares are held by institutional investors. 6.3% of Apple Hospitality REIT shares are held by insiders. Comparatively, 1.6% of Hospitality Properties Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Hospitality Properties Trust beats Apple Hospitality REIT on 11 of the 17 factors compared between the two stocks.

Apple Hospitality REIT Company Profile

Apple Hospitality REIT, Inc. is a hospitality real estate investment trust. The Company invests in real estate, primarily in the lodging sector, in the United States. As of December 5, 2017, the Company owned 239 hotels, with more than 30,300 guestrooms, diversified across the Hilton and Marriott families of brands with locations in urban, high-end suburban and developing markets across 34 states. The Company’s hotels include various brands, such as Hilton Garden Inn, Courtyard, Homewood Suites, Residence Inn, SpringHill Suites, TownePlace Suites, Fairfield Inn, Home2 Suites, Marriott, Embassy Suites, Hilton and Renaissance. The Company’s hotels are located in various states of the United States, such as Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, Ohio, South Carolina, Texas, Utah and Virginia.

Hospitality Properties Trust Company Profile

Hospitality Properties Trust is a real estate investment trust. The Company’s segments include hotel investments, travel center investments and corporate. As of December 31, 2016, the Company owned 306 hotels with 46,583 rooms or suites, and 198 travel centers. As of December 31, 2016, the Company’s properties were located in 45 states in the United States, Canada and Puerto Rico. As of December 31, 2016, the Company’s hotels were operated as Courtyard by Marriott, Royal Sonesta, Sonesta Hotels & Resorts, Candlewood Suites, Residence Inn by Marriott, Sonesta ES Suites, Crowne Plaza Hotels & Resorts, Staybridge Suites, Hyatt Place, Wyndham Grand, Wyndham Hotels & Resorts, InterContinental Hotels & Resorts, Marriott Hotels and Resorts, the Clift Hotel, Radisson Hotels & Resorts, Kimpton Hotels & Restaurants, TownePlace Suites by Marriott, Hawthorn Suites, Country Inns & Suites by Carlson, Holiday Inn Hotels & Resorts, SpringHill Suites by Marriott, and Park Plaza Hotels & Resorts.

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