Contrasting EastGroup Properties (NYSE:EGP) & Summit Hotel Properties (NYSE:INN)

Summit Hotel Properties (NYSE:INN) and EastGroup Properties (NYSE:EGP) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Profitability

This table compares Summit Hotel Properties and EastGroup Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit Hotel Properties	1.00%	0.56%	0.25%
EastGroup Properties	35.58%	7.28%	4.76%

Volatility & Risk

Summit Hotel Properties has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, EastGroup Properties has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Summit Hotel Properties and EastGroup Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Hotel Properties	2	2	0	0	1.50
EastGroup Properties	0	7	8	1	2.63

Summit Hotel Properties currently has a consensus target price of $4.50, suggesting a potential downside of 12.54%. EastGroup Properties has a consensus target price of $190.80, suggesting a potential upside of 6.31%. Given EastGroup Properties’ stronger consensus rating and higher possible upside, analysts clearly believe EastGroup Properties is more favorable than Summit Hotel Properties.

Dividends

Summit Hotel Properties pays an annual dividend of $0.32 per share and has a dividend yield of 6.2%. EastGroup Properties pays an annual dividend of $6.20 per share and has a dividend yield of 3.5%. Summit Hotel Properties pays out -200.0% of its earnings in the form of a dividend. EastGroup Properties pays out 130.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Hotel Properties has increased its dividend for 2 consecutive years and EastGroup Properties has increased its dividend for 4 consecutive years. Summit Hotel Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Summit Hotel Properties and EastGroup Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Hotel Properties	$727.44 million	0.77	$41.02 million	($0.16)	-32.16
EastGroup Properties	$697.92 million	13.72	$227.75 million	$4.76	37.70

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

Insider & Institutional Ownership

96.5% of Summit Hotel Properties shares are owned by institutional investors. Comparatively, 92.1% of EastGroup Properties shares are owned by institutional investors. 3.8% of Summit Hotel Properties shares are owned by company insiders. Comparatively, 1.0% of EastGroup Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

EastGroup Properties beats Summit Hotel Properties on 12 of the 18 factors compared between the two stocks.

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging properties with efficient operating models primarily in the upscale segment of the lodging industry. As of November 1, 2023, the Company’s portfolio consisted of 101 assets, 57 of which are wholly owned, with a total of 15,035 guestrooms located in 24 states.

About EastGroup Properties

EastGroup Properties, Inc. (NYSE: EGP), a member of the S&P Mid-Cap 400 and Russell 1000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. The Company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 59 million square feet.