Critical Review: RLJ Lodging Trust (OTCMKTS:RLJ.PA) and Sunstone Hotel Investors (NYSE:SHO)

RLJ Lodging Trust (OTCMKTS:RLJ.PA) and Sunstone Hotel Investors (NYSE:SHO) are both real estate companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

99.4% of Sunstone Hotel Investors shares are owned by institutional investors. 1.4% of Sunstone Hotel Investors shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares RLJ Lodging Trust and Sunstone Hotel Investors”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLJ Lodging Trust	N/A	N/A	N/A	N/A	N/A
Sunstone Hotel Investors	$985.77 million	2.23	$24.57 million	$0.11	107.05

Sunstone Hotel Investors has higher revenue and earnings than RLJ Lodging Trust.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for RLJ Lodging Trust and Sunstone Hotel Investors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLJ Lodging Trust	0	0	0	0	0.00
Sunstone Hotel Investors	1	6	0	1	2.12

Sunstone Hotel Investors has a consensus price target of $10.67, suggesting a potential downside of 9.41%. Given RLJ Lodging Trust’s higher probable upside, research analysts clearly believe RLJ Lodging Trust is more favorable than Sunstone Hotel Investors.

Profitability

This table compares RLJ Lodging Trust and Sunstone Hotel Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLJ Lodging Trust	N/A	N/A	N/A
Sunstone Hotel Investors	3.84%	2.27%	1.25%

Summary

Sunstone Hotel Investors beats RLJ Lodging Trust on 8 of the 9 factors compared between the two stocks.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 103 hotels with approximately 22,570 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

About Sunstone Hotel Investors

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 14 hotels comprised of 6,675 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate.