Sunstone Hotel Investors (NYSE:SHO) and BRAEMAR HOTELS & RESORTS (NYSE:BHR) Head to Head Review

BRAEMAR HOTELS & RESORTS (NYSE:BHR) and Sunstone Hotel Investors (NYSE:SHO) are both real estate companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Profitability

This table compares BRAEMAR HOTELS & RESORTS and Sunstone Hotel Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BRAEMAR HOTELS & RESORTS	-2.24%	-8.68%	-0.80%
Sunstone Hotel Investors	3.84%	2.27%	1.25%

Volatility and Risk

BRAEMAR HOTELS & RESORTS has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Sunstone Hotel Investors has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Insider & Institutional Ownership

64.8% of BRAEMAR HOTELS & RESORTS shares are owned by institutional investors. Comparatively, 99.4% of Sunstone Hotel Investors shares are owned by institutional investors. 8.2% of BRAEMAR HOTELS & RESORTS shares are owned by insiders. Comparatively, 1.4% of Sunstone Hotel Investors shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares BRAEMAR HOTELS & RESORTS and Sunstone Hotel Investors”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRAEMAR HOTELS & RESORTS	$697.18 million	0.20	-$22.32 million	($0.96)	-2.15
Sunstone Hotel Investors	$960.13 million	2.27	$24.57 million	$0.11	106.23

Sunstone Hotel Investors has higher revenue and earnings than BRAEMAR HOTELS & RESORTS. BRAEMAR HOTELS & RESORTS is trading at a lower price-to-earnings ratio than Sunstone Hotel Investors, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for BRAEMAR HOTELS & RESORTS and Sunstone Hotel Investors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRAEMAR HOTELS & RESORTS	1	2	0	0	1.67
Sunstone Hotel Investors	1	6	0	1	2.12

BRAEMAR HOTELS & RESORTS currently has a consensus price target of $2.50, suggesting a potential upside of 21.07%. Sunstone Hotel Investors has a consensus price target of $10.67, suggesting a potential downside of 8.71%. Given BRAEMAR HOTELS & RESORTS’s higher possible upside, research analysts plainly believe BRAEMAR HOTELS & RESORTS is more favorable than Sunstone Hotel Investors.

Dividends

BRAEMAR HOTELS & RESORTS pays an annual dividend of $0.20 per share and has a dividend yield of 9.7%. Sunstone Hotel Investors pays an annual dividend of $0.36 per share and has a dividend yield of 3.1%. BRAEMAR HOTELS & RESORTS pays out -20.8% of its earnings in the form of a dividend. Sunstone Hotel Investors pays out 327.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunstone Hotel Investors has increased its dividend for 2 consecutive years. BRAEMAR HOTELS & RESORTS is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Sunstone Hotel Investors beats BRAEMAR HOTELS & RESORTS on 13 of the 17 factors compared between the two stocks.

About BRAEMAR HOTELS & RESORTS

Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).

About Sunstone Hotel Investors

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 14 hotels comprised of 6,675 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate.