Hersha Hospitality Trust (NYSE:HT) vs. Chatham Lodging (CLDT) Financial Analysis

Hersha Hospitality Trust (NYSE: HT) and Chatham Lodging (NYSE:CLDT) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Dividends

How to Become a New Pot Stock Millionaire

Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.0%. Chatham Lodging pays an annual dividend of $1.32 per share and has a dividend yield of 6.9%. Hersha Hospitality Trust pays out 51.9% of its earnings in the form of a dividend. Chatham Lodging pays out 61.7% 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. Chatham Lodging has increased its dividend for 3 consecutive years. Chatham Lodging is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Hersha Hospitality Trust and Chatham Lodging’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hersha Hospitality Trust 17.46% 9.47% 4.03%
Chatham Lodging 9.86% 4.11% 2.21%

Analyst Ratings

This is a breakdown of current ratings for Hersha Hospitality Trust and Chatham Lodging, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hersha Hospitality Trust 1 3 5 0 2.44
Chatham Lodging 0 6 1 0 2.14

Hersha Hospitality Trust currently has a consensus price target of $18.89, suggesting a potential upside of 1.66%. Chatham Lodging has a consensus price target of $20.50, suggesting a potential upside of 6.88%. Given Chatham Lodging’s higher probable upside, analysts plainly believe Chatham Lodging is more favorable than Hersha Hospitality Trust.

Volatility and Risk

Hersha Hospitality Trust has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Chatham Lodging has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Insider and Institutional Ownership

97.9% of Hersha Hospitality Trust shares are owned by institutional investors. Comparatively, 88.6% of Chatham Lodging shares are owned by institutional investors. 8.1% of Hersha Hospitality Trust shares are owned by insiders. Comparatively, 3.6% of Chatham Lodging shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Hersha Hospitality Trust and Chatham Lodging’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hersha Hospitality Trust $498.24 million 1.48 $99.86 million $2.16 8.60
Chatham Lodging $298.86 million 2.94 $29.47 million $2.14 8.96

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

Summary

Hersha Hospitality Trust beats Chatham Lodging on 12 of the 17 factors compared between the two stocks.

About Hersha Hospitality Trust

Hersha Hospitality Trust is a self-advised real estate investment trust (REIT). The Company invests primarily in institutional grade hotels in urban gateway markets, including New York, Washington, District of Columbia, Boston, Philadelphia, South Florida and select markets on the West Coast. As of December 31, 2017, the Company’s hotels included 50 hotels totaling 7,725 rooms located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company’s properties operate under brands that include Marriott International, Hilton Hotels, Hyatt Hotels, Intercontinental Hotel Group, and Pan Pacific.

About Chatham Lodging

Chatham Lodging Trust is a self-advised, publicly-traded real estate investment trust focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns interests in 135 hotels totaling 18,516 rooms/suites, comprised of 40 properties it wholly owns with an aggregate of 6,018 rooms/suites in 15 states and the District of Columbia and a minority investment in two joint ventures that own 95 hotels with an aggregate of 12,498 rooms/suites. Additional information about Chatham may be found at chathamlodgingtrust.com.

Receive News & Ratings for Hersha Hospitality Trust Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Hersha Hospitality Trust and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply