Chesapeake Lodging Trust (NYSE:CHSP) versus Apple Hospitality REIT (APLE) Critical Survey

Apple Hospitality REIT (NYSE: APLE) and Chesapeake Lodging Trust (NYSE:CHSP) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Profitability

This table compares Apple Hospitality REIT and Chesapeake Lodging 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%
Chesapeake Lodging Trust 9.71% 5.11% 2.87%

Earnings & Valuation

This table compares Apple Hospitality REIT and Chesapeake Lodging Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Apple Hospitality REIT $1.04 billion 4.10 $144.65 million $1.01 18.94
Chesapeake Lodging Trust $619.70 million 2.71 $76.70 million $0.81 34.52

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

Volatility & Risk

Apple Hospitality REIT has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Chesapeake Lodging Trust has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Apple Hospitality REIT and Chesapeake Lodging Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apple Hospitality REIT 0 4 1 0 2.20
Chesapeake Lodging Trust 0 4 2 0 2.33

Apple Hospitality REIT presently has a consensus target price of $19.67, suggesting a potential upside of 2.81%. Chesapeake Lodging Trust has a consensus target price of $25.80, suggesting a potential downside of 7.73%. Given Apple Hospitality REIT’s higher possible upside, research analysts clearly believe Apple Hospitality REIT is more favorable than Chesapeake Lodging Trust.

Dividends

Apple Hospitality REIT pays an annual dividend of $1.20 per share and has a dividend yield of 6.3%. Chesapeake Lodging Trust pays an annual dividend of $1.60 per share and has a dividend yield of 5.7%. 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. Chesapeake Lodging Trust pays out 197.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apple Hospitality REIT has raised its dividend for 5 consecutive years. Apple Hospitality REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

49.2% of Apple Hospitality REIT shares are held by institutional investors. Comparatively, 98.3% of Chesapeake Lodging Trust shares are held by institutional investors. 6.3% of Apple Hospitality REIT shares are held by company insiders. Comparatively, 2.2% of Chesapeake Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Apple Hospitality REIT beats Chesapeake Lodging Trust on 12 of the 17 factors compared between the two stocks.

About Apple Hospitality REIT

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 September 13, 2017, the Company owned 237 hotels, with more than 30,000 guestrooms, diversified across the Hilton and Marriott families of brands with locations in urban, high-end suburban and developing markets across 33 states. As of December 31, 2016, the Company’s hotels included 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. As of December 31, 2016, the Company’s hotels were 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.

About Chesapeake Lodging Trust

Chesapeake Lodging Trust is a real estate investment trust. The Company is focused on investments primarily in upper-upscale hotels in various business and convention markets and, on a selective basis, select-service hotels in urban settings or other locations in the United States. The Company operates through the hotel ownership segment. The Company conducts its operations primarily though Chesapeake Lodging, L.P., its operating partnership (the Operating Partnership). As of February 17, 2017, the Company owned 22 hotels. As of February 17, 2017, the Company’s portfolio included Hyatt Regency Boston; Hilton Checkers Los Angeles; Boston Marriott Newton; Le Meridien San Francisco; Hotel Indigo San Diego Gaslamp Quarter; Courtyard Washington Capitol Hill/Navy Yard; Hotel Adagio San Francisco, Autograph Collection; Denver Marriott City Center; Hyatt Herald Square New York, and Ace Hotel and Theater Downtown Los Angeles. As of February 17, 2017, the Company’s hotels had 6,694 rooms.

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