InnSuites Hospitality Trust (NYSE:IHT) versus Sunstone Hotel Investors (NYSE:SHO) Critical Analysis

Sunstone Hotel Investors (NYSE:SHO) and InnSuites Hospitality Trust (NYSE:IHT) are both real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings for Sunstone Hotel Investors and InnSuites Hospitality Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunstone Hotel Investors	1	5	1	1	2.25
InnSuites Hospitality Trust	0	0	0	0	0.00

Sunstone Hotel Investors currently has a consensus target price of $10.67, indicating a potential downside of 6.10%. Given Sunstone Hotel Investors’ stronger consensus rating and higher probable upside, analysts clearly believe Sunstone Hotel Investors is more favorable than InnSuites Hospitality Trust.

Dividends

Sunstone Hotel Investors pays an annual dividend of $0.36 per share and has a dividend yield of 3.2%. InnSuites Hospitality Trust pays an annual dividend of $0.02 per share and has a dividend yield of 1.5%. Sunstone Hotel Investors pays out 163.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. InnSuites Hospitality Trust pays out -14.3% of its earnings in the form of a dividend. Sunstone Hotel Investors has raised its dividend for 2 consecutive years. Sunstone Hotel Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Sunstone Hotel Investors and InnSuites Hospitality Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunstone Hotel Investors	$960.13 million	2.20	$24.57 million	$0.22	51.64
InnSuites Hospitality Trust	$7.56 million	1.62	$200,000.00	($0.14)	-9.29

Sunstone Hotel Investors has higher revenue and earnings than InnSuites Hospitality Trust. InnSuites Hospitality Trust 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.

Risk and Volatility

Sunstone Hotel Investors has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, InnSuites Hospitality Trust has a beta of 0.29, meaning that its stock price is 71% less volatile than the S&P 500.

Profitability

This table compares Sunstone Hotel Investors and InnSuites Hospitality Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunstone Hotel Investors	5.30%	3.21%	1.75%
InnSuites Hospitality Trust	-11.56%	-40.28%	-5.83%

Insider & Institutional Ownership

99.4% of Sunstone Hotel Investors shares are owned by institutional investors. Comparatively, 2.5% of InnSuites Hospitality Trust shares are owned by institutional investors. 1.4% of Sunstone Hotel Investors shares are owned by insiders. Comparatively, 68.1% of InnSuites Hospitality Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Sunstone Hotel Investors beats InnSuites Hospitality Trust on 16 of the 18 factors compared between the two stocks.

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.

About InnSuites Hospitality Trust

InnSuites Hospitality Trust (NYSE American symbol: IHT) first listed on the NYSE in 1971 is headquartered in Phoenix, Arizona is an unincorporated Ohio Business. Trust that owns and manages hotels under the InnSuites Hotels name. IHT qualifies as a Real Estate Investment Trust (REIT) for tax treatment currently taxed as a corporation with the IRS. IHT has paid dividends each year since 1971 currently at $0.2/year. There are approximately 9 million shares of stock outstanding. In addition, there are approximately 3 million RRF Partnership units convertible 1 to 1 into IHT stock. Total shares and units are approximately 12 million.