Critical Survey: LaSalle Hotel Properties (LHO) vs. Hersha Hospitality Trust (HT)

Hersha Hospitality Trust (NYSE: HT) and LaSalle Hotel Properties (NYSE:LHO) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Earnings & Valuation

This table compares Hersha Hospitality Trust and LaSalle Hotel Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hersha Hospitality Trust $471.75 million 1.61 $138.69 million $2.30 7.87
LaSalle Hotel Properties $1.18 billion 2.67 $371.93 million $2.69 10.33

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

Dividends

Hersha Hospitality Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.2%. LaSalle Hotel Properties pays an annual dividend of $1.80 per share and has a dividend yield of 6.5%. Hersha Hospitality Trust pays out 48.7% of its earnings in the form of a dividend. LaSalle Hotel Properties pays out 66.9% 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. Hersha Hospitality Trust has increased its dividend for 5 consecutive years and LaSalle Hotel Properties has increased its dividend for 3 consecutive years.

Volatility and Risk

Hersha Hospitality Trust has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, LaSalle Hotel Properties has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Hersha Hospitality Trust and LaSalle Hotel Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hersha Hospitality Trust 1 4 2 0 2.14
LaSalle Hotel Properties 2 10 2 0 2.00

Hersha Hospitality Trust presently has a consensus target price of $20.00, indicating a potential upside of 10.50%. LaSalle Hotel Properties has a consensus target price of $28.46, indicating a potential upside of 2.37%. Given Hersha Hospitality Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe Hersha Hospitality Trust is more favorable than LaSalle Hotel Properties.

Institutional and Insider Ownership

96.6% of Hersha Hospitality Trust shares are held by institutional investors. 8.1% of Hersha Hospitality Trust shares are held by insiders. Comparatively, 0.4% of LaSalle Hotel Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Hersha Hospitality Trust and LaSalle Hotel Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hersha Hospitality Trust 22.77% 14.78% 6.13%
LaSalle Hotel Properties 27.85% 13.05% 8.48%

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 July 20, 2017, the Company’s hotels included 51 hotels totaling 7,804 rooms located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company’s property brands include Marriott International, Hilton Hotels, Hyatt Hotels, Intercontinental Hotel Group, Wyndham Hotels and Hersha’s Independent Hotel Collection.

About LaSalle Hotel Properties

LaSalle Hotel Properties is a self-administered and self-managed real estate investment trust. The Company primarily buys, owns, redevelops and leases upscale and luxury full-service hotels located in convention, resort and urban business markets. As of December 31, 2016, the Company owned interests in 46 hotels with approximately 11,450 guest rooms located in nine states of the United States and the District of Columbia (DC). As of December 31, 2016, the Company’s properties included Hotel Amarano Burbank; Hilton San Diego Gaslamp Quarter; Hotel Solamar; San Diego Paradise Point Resort and Spa; The Hilton San Diego Resort and Spa; Harbor Court Hotel; The Marker San Francisco; Chamberlain West Hollywood; Le Montrose Suite Hotel; The Grafton on Sunset; Hotel George; Hotel Rouge; Mason & Rook Hotel; The Donovan; The Liaison Capitol Hill; The Marker Waterfront Resort; Hotel Chicago; Onyx Hotel; Park Central Hotel New York; The Heathman Hotel; Westin Philadelphia, and Lansdowne Resort.

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