Critical Review: CTO Realty Growth (NYSE:CTO) versus Summit Hotel Properties (NYSE:INN)

CTO Realty Growth (NYSE:CTO) and Summit Hotel Properties (NYSE:INN) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Dividends

CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 7.5%. Summit Hotel Properties pays an annual dividend of $0.32 per share and has a dividend yield of 5.9%. CTO Realty Growth pays out 723.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Hotel Properties pays out -110.3% of its earnings in the form of a dividend. Summit Hotel Properties has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for CTO Realty Growth and Summit Hotel Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CTO Realty Growth	0	2	3	1	2.83
Summit Hotel Properties	2	2	1	0	1.80

CTO Realty Growth presently has a consensus target price of $22.67, indicating a potential upside of 12.02%. Summit Hotel Properties has a consensus target price of $5.00, indicating a potential downside of 7.49%. Given CTO Realty Growth’s stronger consensus rating and higher probable upside, analysts plainly believe CTO Realty Growth is more favorable than Summit Hotel Properties.

Profitability

This table compares CTO Realty Growth and Summit Hotel Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CTO Realty Growth	9.06%	2.47%	1.12%
Summit Hotel Properties	-1.75%	-1.03%	-0.46%

Volatility & Risk

CTO Realty Growth has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Summit Hotel Properties has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Earnings and Valuation

This table compares CTO Realty Growth and Summit Hotel Properties”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CTO Realty Growth	$154.91 million	4.41	$10.09 million	$0.21	96.36
Summit Hotel Properties	$729.47 million	0.80	-$7.69 million	($0.29)	-18.64

CTO Realty Growth has higher earnings, but lower revenue than Summit Hotel Properties. Summit Hotel Properties is trading at a lower price-to-earnings ratio than CTO Realty Growth, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

67.2% of CTO Realty Growth shares are owned by institutional investors. Comparatively, 96.5% of Summit Hotel Properties shares are owned by institutional investors. 4.0% of CTO Realty Growth shares are owned by company insiders. Comparatively, 4.3% of Summit Hotel Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

CTO Realty Growth beats Summit Hotel Properties on 12 of the 18 factors compared between the two stocks.

About CTO Realty Growth

CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging properties with efficient operating models primarily in the upscale segment of the lodging industry. As of November 1, 2023, the Company’s portfolio consisted of 101 assets, 57 of which are wholly owned, with a total of 15,035 guestrooms located in 24 states.