Ashford Hospitality Trust (NYSE: AHT) and Chatham Lodging Trust (REIT) (NYSE:CLDT) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.
Dividends
Ashford Hospitality Trust pays an annual dividend of $0.48 per share and has a dividend yield of 7.9%. Chatham Lodging Trust (REIT) pays an annual dividend of $1.32 per share and has a dividend yield of 6.6%. Ashford Hospitality Trust pays out -35.8% of its earnings in the form of a dividend. Chatham Lodging Trust (REIT) pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust (REIT) has increased its dividend for 2 consecutive years. Ashford Hospitality Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Ashford Hospitality Trust has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Chatham Lodging Trust (REIT) has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500.
Earnings and Valuation
This table compares Ashford Hospitality Trust and Chatham Lodging Trust (REIT)’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Ashford Hospitality Trust | $1.45 billion | 0.41 | $394.52 million | ($1.34) | -4.52 |
| Chatham Lodging Trust (REIT) | $290.53 million | 2.70 | $106.69 million | $0.66 | 30.38 |
Ashford Hospitality Trust has higher revenue and earnings than Chatham Lodging Trust (REIT). Ashford Hospitality Trust is trading at a lower price-to-earnings ratio than Chatham Lodging Trust (REIT), indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Ashford Hospitality Trust and Chatham Lodging Trust (REIT)’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ashford Hospitality Trust | -5.43% | -10.41% | -1.64% |
| Chatham Lodging Trust (REIT) | 8.73% | 3.76% | 1.97% |
Insider and Institutional Ownership
72.6% of Ashford Hospitality Trust shares are owned by institutional investors. Comparatively, 81.2% of Chatham Lodging Trust (REIT) shares are owned by institutional investors. 18.2% of Ashford Hospitality Trust shares are owned by company insiders. Comparatively, 3.6% of Chatham Lodging Trust (REIT) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings for Ashford Hospitality Trust and Chatham Lodging Trust (REIT), as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ashford Hospitality Trust | 0 | 3 | 3 | 0 | 2.50 |
| Chatham Lodging Trust (REIT) | 0 | 3 | 0 | 0 | 2.00 |
Ashford Hospitality Trust presently has a consensus target price of $7.46, indicating a potential upside of 23.07%. Chatham Lodging Trust (REIT) has a consensus target price of $19.75, indicating a potential downside of 1.50%. Given Ashford Hospitality Trust’s stronger consensus rating and higher probable upside, research analysts clearly believe Ashford Hospitality Trust is more favorable than Chatham Lodging Trust (REIT).
Summary
Ashford Hospitality Trust beats Chatham Lodging Trust (REIT) on 9 of the 16 factors compared between the two stocks.
About Ashford Hospitality Trust
Ashford Hospitality Trust, Inc. is an externally-advised real estate investment trust (REIT). The Company is focused on investing in the hospitality industry with a focus on full-service upscale and upper-upscale hotels in the United States. The Company owns its lodging investments and conducts its business through Ashford Hospitality Limited Partnership (Ashford Trust OP), its operating partnership. The Company’s portfolio consists of 121 properties with over 25000 rooms; 86 hotel condominium units at WorldQuest Resort in Orlando, Florida; a 96.6% ownership in Ashford Quantitative Alternatives (U.S.), LP (the AQUA U.S. Fund); a 29.7% ownership in Ashford Inc., and a 13.3% ownership in OpenKey.
About Chatham Lodging Trust (REIT)
Chatham Lodging Trust is a real estate investment trust. The Company invests primarily in upscale extended-stay and premium-branded select-service hotels. All of the Company’s assets are held by, and all of its operations are conducted through Chatham Lodging, L.P. (the Operating Partnership). As of December 31, 2016, the Company owned 38 hotels with an aggregate of 5,712 rooms located in 15 states and the District of Columbia. As of December 31, 2016, the Company’s hotels included upscale extended-stay hotels that operate under the Residence Inn by Marriott brand (15 hotels) and Homewood Suites by Hilton brand (nine hotels), as well as premium-branded select-service hotels that operate under the Courtyard by Marriott brand (four hotels), the Hampton Inn or Hampton Inn and Suites by Hilton brand (three hotels), the Hilton Garden Inn by Hilton brand (three hotels), the SpringHill Suites by Marriott brand (two hotels) and the Hyatt Place brand (two hotels).
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