Summit Hotel Properties (NYSE:INN) and SBA Communications (NASDAQ:SBAC) Financial Review

SBA Communications (NASDAQ:SBAC) and Summit Hotel Properties (NYSE:INN) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares SBA Communications and Summit Hotel Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SBA Communications	35.66%	-20.90%	8.98%
Summit Hotel Properties	-1.75%	-1.03%	-0.46%

Analyst Recommendations

This is a summary of current ratings and price targets for SBA Communications and Summit Hotel Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SBA Communications	0	10	8	1	2.53
Summit Hotel Properties	2	2	1	0	1.80

SBA Communications presently has a consensus price target of $237.63, indicating a potential upside of 9.05%. Summit Hotel Properties has a consensus price target of $5.00, indicating a potential downside of 1.81%. Given SBA Communications’ stronger consensus rating and higher possible upside, research analysts clearly believe SBA Communications is more favorable than Summit Hotel Properties.

Earnings & Valuation

This table compares SBA Communications and Summit Hotel Properties”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SBA Communications	$2.82 billion	8.19	$1.05 billion	$9.50	22.94
Summit Hotel Properties	$729.47 million	0.76	-$7.69 million	($0.29)	-17.56

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

Volatility and Risk

SBA Communications has a beta of 1.03, meaning that its stock price is 3% more 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.

Dividends

SBA Communications pays an annual dividend of $5.00 per share and has a dividend yield of 2.3%. Summit Hotel Properties pays an annual dividend of $0.32 per share and has a dividend yield of 6.3%. SBA Communications pays out 52.6% of its earnings in the form of a dividend. Summit Hotel Properties pays out -110.3% 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. SBA Communications has increased its dividend for 6 consecutive years and Summit Hotel Properties has increased its dividend for 2 consecutive years. Summit Hotel Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

97.4% of SBA Communications shares are held by institutional investors. Comparatively, 96.5% of Summit Hotel Properties shares are held by institutional investors. 9.5% of SBA Communications shares are held by insiders. Comparatively, 4.3% of Summit Hotel Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

SBA Communications beats Summit Hotel Properties on 14 of the 18 factors compared between the two stocks.

About SBA Communications

SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 39,000 communications sites throughout the Americas, Africa and in Asia, SBA is listed on NASDAQ under the symbol SBAC. Our organization is part of the S&P 500 and is one of the top Real Estate Investment Trusts (REITs) by market capitalization.

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.