Critical Analysis: Xenia Hotels & Resorts (NYSE:XHR) versus Ventas (NYSE:VTR)

Xenia Hotels & Resorts (NYSE:XHR) and Ventas (NYSE:VTR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Volatility and Risk

Xenia Hotels & Resorts has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500. Comparatively, Ventas has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Profitability

This table compares Xenia Hotels & Resorts and Ventas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xenia Hotels & Resorts	5.86%	4.95%	2.19%
Ventas	3.61%	1.75%	0.74%

Dividends

Xenia Hotels & Resorts pays an annual dividend of $0.56 per share and has a dividend yield of 4.2%. Ventas pays an annual dividend of $1.92 per share and has a dividend yield of 2.7%. Xenia Hotels & Resorts pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ventas pays out 446.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Xenia Hotels & Resorts has raised its dividend for 3 consecutive years and Ventas has raised its dividend for 1 consecutive years. Xenia Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Xenia Hotels & Resorts and Ventas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xenia Hotels & Resorts	1	2	2	1	2.50
Ventas	0	4	10	1	2.80

Xenia Hotels & Resorts currently has a consensus price target of $13.20, indicating a potential downside of 1.75%. Ventas has a consensus price target of $75.46, indicating a potential upside of 7.18%. Given Ventas’ stronger consensus rating and higher probable upside, analysts plainly believe Ventas is more favorable than Xenia Hotels & Resorts.

Institutional & Insider Ownership

92.4% of Xenia Hotels & Resorts shares are owned by institutional investors. Comparatively, 94.2% of Ventas shares are owned by institutional investors. 3.2% of Xenia Hotels & Resorts shares are owned by company insiders. Comparatively, 0.8% of Ventas shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Xenia Hotels & Resorts and Ventas”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xenia Hotels & Resorts	$1.04 billion	1.24	$16.14 million	$0.63	21.33
Ventas	$4.92 billion	6.50	$81.15 million	$0.43	163.73

Ventas has higher revenue and earnings than Xenia Hotels & Resorts. Xenia Hotels & Resorts is trading at a lower price-to-earnings ratio than Ventas, indicating that it is currently the more affordable of the two stocks.

Summary

Xenia Hotels & Resorts beats Ventas on 9 of the 17 factors compared between the two stocks.

About Xenia Hotels & Resorts

Xenia Hotels & Resorts, Inc. is a real estate investment trust, which engages in the provision of investment in luxury and upper upscale hotels and resorts. It also owns a diversified portfolio of lodging properties operated by Marriott, Kimpton, Hyatt, Aston, Fairmong, and Loews. The company was founded in 2007 and is headquartered in Orlando, FL.

About Ventas

Ventas Inc. (NYSE: VTR) is a leading S&P 500 real estate investment trust focused on delivering strong, sustainable shareholder returns by enabling exceptional environments that benefit a large and growing aging population. The Company's growth is fueled by its senior housing communities, which provide valuable services to residents and enable them to thrive in supported environments. Ventas leverages its unmatched operational expertise, data-driven insights from its Ventas Operational InsightsTM platform, extensive relationships and strong financial position to achieve its goal of delivering outsized performance across approximately 1,400 properties. The Ventas portfolio is composed of senior housing communities, outpatient medical buildings, research centers and healthcare facilities in North America and the United Kingdom. The Company benefits from a seasoned team of talented professionals who share a commitment to excellence, integrity and a common purpose of helping people live longer, healthier, happier lives.