Pebblebrook Hotel Trust (NYSE:PEB) vs. DiamondRock Hospitality (NYSE:DRH) Head-To-Head Analysis

DiamondRock Hospitality (NYSE:DRH) and Pebblebrook Hotel Trust (NYSE:PEB) are both mid-cap real estate companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Valuation & Earnings

This table compares DiamondRock Hospitality and Pebblebrook Hotel Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DiamondRock Hospitality	$1.15 billion	2.56	$48.05 million	$0.79	18.16
Pebblebrook Hotel Trust	$1.48 billion	1.65	-$65.81 million	($0.88)	-24.72

DiamondRock Hospitality has higher earnings, but lower revenue than Pebblebrook Hotel Trust. Pebblebrook Hotel Trust is trading at a lower price-to-earnings ratio than DiamondRock Hospitality, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

DiamondRock Hospitality has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Pebblebrook Hotel Trust has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Profitability

This table compares DiamondRock Hospitality and Pebblebrook Hotel Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DiamondRock Hospitality	5.69%	4.04%	2.05%
Pebblebrook Hotel Trust	-4.55%	-2.73%	-1.30%

Dividends

DiamondRock Hospitality pays an annual dividend of $0.44 per share and has a dividend yield of 3.1%. Pebblebrook Hotel Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. DiamondRock Hospitality pays out 55.7% of its earnings in the form of a dividend. Pebblebrook Hotel Trust pays out -4.5% 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. DiamondRock Hospitality has increased its dividend for 1 consecutive years. DiamondRock Hospitality is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings for DiamondRock Hospitality and Pebblebrook Hotel Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DiamondRock Hospitality	0	7	4	0	2.36
Pebblebrook Hotel Trust	3	6	3	2	2.29

DiamondRock Hospitality presently has a consensus price target of $13.03, suggesting a potential downside of 9.21%. Pebblebrook Hotel Trust has a consensus price target of $18.27, suggesting a potential downside of 16.00%. Given DiamondRock Hospitality’s stronger consensus rating and higher probable upside, equities analysts plainly believe DiamondRock Hospitality is more favorable than Pebblebrook Hotel Trust.

Summary

DiamondRock Hospitality beats Pebblebrook Hotel Trust on 12 of the 16 factors compared between the two stocks.

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust ("REIT") and the largest owner of urban and resort lifestyle hotels and resorts in the United States. The Company owns 47 hotels and resorts, totaling approximately 12,200 guest rooms across 13 urban and resort markets.