Analyzing Chatham Lodging Trust (NYSE:CLDT) & Gladstone Commercial (NASDAQ:GOOD)

Chatham Lodging Trust (NYSE:CLDT) and Gladstone Commercial (NASDAQ:GOOD) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Analyst Recommendations

This is a summary of current recommendations for Chatham Lodging Trust and Gladstone Commercial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chatham Lodging Trust	0	3	2	0	2.40
Gladstone Commercial	0	3	0	0	2.00

Chatham Lodging Trust presently has a consensus price target of $12.50, indicating a potential downside of 6.67%. Gladstone Commercial has a consensus price target of $12.75, indicating a potential upside of 5.63%. Given Gladstone Commercial’s higher probable upside, analysts clearly believe Gladstone Commercial is more favorable than Chatham Lodging Trust.

Volatility & Risk

Chatham Lodging Trust has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Gladstone Commercial has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Dividends

Chatham Lodging Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.0%. Gladstone Commercial pays an annual dividend of $1.20 per share and has a dividend yield of 9.9%. Chatham Lodging Trust pays out 2,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Commercial pays out 666.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust has raised its dividend for 2 consecutive years. Gladstone Commercial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

88.4% of Chatham Lodging Trust shares are held by institutional investors. Comparatively, 45.5% of Gladstone Commercial shares are held by institutional investors. 8.1% of Chatham Lodging Trust shares are held by insiders. Comparatively, 1.3% of Gladstone Commercial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Chatham Lodging Trust and Gladstone Commercial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chatham Lodging Trust	$293.94 million	2.13	$15.05 million	$0.02	669.70
Gladstone Commercial	$161.34 million	3.62	$19.29 million	$0.18	67.06

Gladstone Commercial has lower revenue, but higher earnings than Chatham Lodging Trust. Gladstone Commercial is trading at a lower price-to-earnings ratio than Chatham Lodging Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Chatham Lodging Trust and Gladstone Commercial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chatham Lodging Trust	3.14%	1.18%	0.77%
Gladstone Commercial	12.74%	12.11%	1.71%

Summary

Gladstone Commercial beats Chatham Lodging Trust on 9 of the 17 factors compared between the two stocks.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia.

About Gladstone Commercial

Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Including payments through January 2024, Gladstone Commercial has paid 229 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, Gladstone Commercial paid five consecutive quarterly cash distributions. Gladstone Commercial has never skipped or deferred a distribution since its inception in 2003.