Reviewing Xenia Hotels & Resorts (NYSE:XHR) and Diversified Healthcare Trust (NASDAQ:DHC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-21.10%	-18.75%	-7.09%
Xenia Hotels & Resorts	6.20%	5.53%	2.38%

Analyst Recommendations

This is a summary of recent recommendations for Diversified Healthcare Trust and Xenia Hotels & Resorts, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	2	2	1	2.50
Xenia Hotels & Resorts	0	0	3	0	3.00

Diversified Healthcare Trust currently has a consensus target price of $8.17, suggesting a potential downside of 2.20%. Xenia Hotels & Resorts has a consensus target price of $17.33, suggesting a potential upside of 9.11%. Given Xenia Hotels & Resorts’ stronger consensus rating and higher probable upside, analysts clearly believe Xenia Hotels & Resorts is more favorable than Diversified Healthcare Trust.

Insider & Institutional Ownership

76.0% of Diversified Healthcare Trust shares are owned by institutional investors. Comparatively, 92.4% of Xenia Hotels & Resorts shares are owned by institutional investors. 10.2% of Diversified Healthcare Trust shares are owned by company insiders. Comparatively, 4.4% of Xenia Hotels & Resorts shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Diversified Healthcare Trust and Xenia Hotels & Resorts”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.54 billion	1.31	-$285.89 million	($1.33)	-6.28
Xenia Hotels & Resorts	$1.08 billion	1.36	$63.09 million	$0.70	22.69

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

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Xenia Hotels & Resorts pays an annual dividend of $0.56 per share and has a dividend yield of 3.5%. Diversified Healthcare Trust pays out -3.0% of its earnings in the form of a dividend. Xenia Hotels & Resorts pays out 80.0% 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 increased its dividend for 3 consecutive years. Xenia Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Diversified Healthcare Trust has a beta of 2.33, suggesting that its share price is 133% more volatile than the S&P 500. Comparatively, Xenia Hotels & Resorts has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Summary

Xenia Hotels & Resorts beats Diversified Healthcare Trust on 13 of the 18 factors compared between the two stocks.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.

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.