Head to Head Analysis: Pebblebrook Hotel Trust (PEB) vs. Ashford Hospitality Prime (AHP)

Ashford Hospitality Prime (NYSE: AHP) and Pebblebrook Hotel Trust (NYSE:PEB) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitabiliy, valuation, earnings, risk and institutional ownership.

Institutional & Insider Ownership

68.0% of Ashford Hospitality Prime shares are held by institutional investors. 23.7% of Ashford Hospitality Prime shares are held by company insiders. Comparatively, 1.9% of Pebblebrook Hotel Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Ashford Hospitality Prime has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, Pebblebrook Hotel Trust has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Ashford Hospitality Prime and Pebblebrook Hotel Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ashford Hospitality Prime 0 2 3 0 2.60
Pebblebrook Hotel Trust 1 6 1 0 2.00

Ashford Hospitality Prime presently has a consensus target price of $14.75, suggesting a potential upside of 44.61%. Pebblebrook Hotel Trust has a consensus target price of $29.00, suggesting a potential downside of 13.41%. Given Ashford Hospitality Prime’s stronger consensus rating and higher probable upside, equities analysts plainly believe Ashford Hospitality Prime is more favorable than Pebblebrook Hotel Trust.

Profitability

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

Net Margins Return on Equity Return on Assets
Ashford Hospitality Prime 4.82% 6.10% 1.46%
Pebblebrook Hotel Trust 8.87% 4.38% 2.46%

Dividends

Ashford Hospitality Prime pays an annual dividend of $0.64 per share and has a dividend yield of 6.3%. Pebblebrook Hotel Trust pays an annual dividend of $1.52 per share and has a dividend yield of 4.5%. Ashford Hospitality Prime pays out 130.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pebblebrook Hotel Trust pays out 220.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ashford Hospitality Prime has raised its dividend for 4 consecutive years and Pebblebrook Hotel Trust has raised its dividend for 2 consecutive years. Ashford Hospitality Prime is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Ashford Hospitality Prime and Pebblebrook Hotel Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ashford Hospitality Prime $403.42 million 0.69 $91.62 million $0.49 20.82
Pebblebrook Hotel Trust $805.01 million 2.89 $249.36 million $0.69 48.54

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

Summary

Ashford Hospitality Prime beats Pebblebrook Hotel Trust on 9 of the 17 factors compared between the two stocks.

About Ashford Hospitality Prime

Ashford Hospitality Prime, Inc. invests in high revenue per available room (RevPAR), luxury hotels and resorts. The Company conducts its business and owns all of its assets through its operating partnership, Ashford Hospitality Prime Limited Partnership (Ashford Prime OP). The Company operates in the direct hotel investment segment of the hotel lodging industry. As of February 24, 2017, it owned interests in 11 hotel properties in six states, the District of Columbia and St. Thomas, the United States Virgin Islands with 3,702 total rooms, or 3,467 net rooms, excluding those attributable to its joint venture partner. The hotel properties in its portfolio are mainly located in the Unites States urban markets. The Company owns nine of its hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated entity. All of the hotels in the Company’s portfolio are asset-managed by Ashford Hospitality Advisors LLC.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust is an internally managed hotel investment company. The Company is a real estate investment trust (REIT) that acquires and invests in hotel properties located primarily in cities of the United States. As of December 31, 2016, the Company owned 29 hotels with a total of 7,219 guest rooms. The hotels are located in the markets: Atlanta (Buckhead), Georgia; Boston, Massachusetts; Miami (Coral Gables), Florida; Minneapolis, Minnesota; Naples, Florida; Nashville, Tennessee; New York, New York; Philadelphia, Pennsylvania; Portland, Oregon; San Diego, California; San Francisco, California; Santa Monica, California; Seattle, Washington; Stevenson, Washington; Washington, D.C.; West Hollywood, California, and Los Angeles (Beverly Hills), California. The Company’s assets are held by, and all of the operations are conducted through, Pebblebrook Hotel, L.P. (the Operating Partnership).

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