Analyzing RLJ Lodging Trust (RLJ) & Host Hotels and Resorts (HST)

RLJ Lodging Trust (NYSE: RLJ) and Host Hotels and Resorts (NYSE:HST) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Volatility & Risk

RLJ Lodging Trust has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Host Hotels and Resorts has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Earnings and Valuation

This table compares RLJ Lodging Trust and Host Hotels and Resorts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RLJ Lodging Trust $1.16 billion 3.35 $200.35 million $1.13 19.67
Host Hotels and Resorts $5.43 billion 2.71 $762.00 million $0.81 24.52

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

Profitability

This table compares RLJ Lodging Trust and Host Hotels and Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RLJ Lodging Trust 12.30% 5.80% 3.04%
Host Hotels and Resorts 11.11% 8.44% 5.11%

Analyst Ratings

This is a breakdown of recent ratings and price targets for RLJ Lodging Trust and Host Hotels and Resorts, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RLJ Lodging Trust 1 5 5 0 2.36
Host Hotels and Resorts 1 6 7 0 2.43

RLJ Lodging Trust presently has a consensus target price of $23.36, indicating a potential upside of 5.10%. Host Hotels and Resorts has a consensus target price of $20.35, indicating a potential upside of 2.47%. Given RLJ Lodging Trust’s higher possible upside, equities analysts clearly believe RLJ Lodging Trust is more favorable than Host Hotels and Resorts.

Dividends

RLJ Lodging Trust pays an annual dividend of $1.32 per share and has a dividend yield of 5.9%. Host Hotels and Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. RLJ Lodging Trust pays out 116.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels and Resorts pays out 98.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust has increased its dividend for 7 consecutive years and Host Hotels and Resorts has increased its dividend for 7 consecutive years.

Institutional and Insider Ownership

94.4% of RLJ Lodging Trust shares are held by institutional investors. 2.3% of RLJ Lodging Trust shares are held by company insiders. Comparatively, 1.7% of Host Hotels and Resorts shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Host Hotels and Resorts beats RLJ Lodging Trust on 9 of the 16 factors compared between the two stocks.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-administered real estate investment trust. The Company is engaged in the acquisition of focused-service and compact full-service hotels. As of December 31, 2016, the Company owned 122 hotels with approximately 20,100 rooms, located in 21 states and the District of Columbia, and an interest in one mortgage loan secured by a hotel. Its hotels’ brand affiliations include Residence Inn, Courtyard, SpringHill Suites, Fairfield Inn & Suites, Marriott, Renaissance, Hilton Garden Inn, Hampton Inn/Hampton Inn & Suites, Embassy Suites, DoubleTree, Homewood Suites, Hilton, Hyatt House, Hyatt Place and Hyatt/Hyatt Centric. Its operating partnership is RLJ Lodging Trust, L.P. Its properties include Courtyard San Francisco, Courtyard Boulder Longmont, Residence Inn Longmont Boulder, DoubleTree Grand Key Resort, Courtyard Atlanta Buckhead, Courtyard Chicago Southeast Hammond, Courtyard Louisville Northeast, DoubleTree Hotel Columbia and Residence Inn Detroit Novi.

About Host Hotels and Resorts

Host Hotels & Resorts, Inc. (Host Inc.) operates as a self-managed and self-administered real estate investment trust (REIT). The Company operates through hotel ownership segment. The Company operates through hotel ownership segment. The Company owned properties and conducted operations through Host Hotels & Resorts, L.P. (Host L.P.), of which Host Inc. was the general partner and of which it held approximately 99% of the partnership interests (OP units), as of December 31, 2016. As of February 20, 2017, its lodging portfolio consisted of 96 primarily luxury and upper-upscale hotels containing approximately 53,500 rooms, with the majority located in the United States, and with seven of the properties located outside of the United States in Australia, Brazil, Canada and Mexico. In addition, it owns non-controlling interests in two international joint ventures: approximately a 33% interest in a joint venture in Europe, and a 9% indirect interest, through joint ventures in India.

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