Head to Head Survey: DiamondRock Hospitality (NYSE:DRH) and Host Hotels & Resorts (NASDAQ:HST)

Host Hotels & Resorts (NASDAQ:HST) and DiamondRock Hospitality (NYSE:DRH) are both real estate companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Host Hotels & Resorts and DiamondRock Hospitality, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Host Hotels & Resorts	0	6	9	1	2.69
DiamondRock Hospitality	0	7	4	0	2.36

Host Hotels & Resorts currently has a consensus price target of $25.14, suggesting a potential downside of 2.18%. DiamondRock Hospitality has a consensus price target of $13.03, suggesting a potential downside of 9.92%. Given Host Hotels & Resorts’ stronger consensus rating and higher possible upside, analysts plainly believe Host Hotels & Resorts is more favorable than DiamondRock Hospitality.

Profitability

This table compares Host Hotels & Resorts and DiamondRock Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Host Hotels & Resorts	16.51%	15.53%	7.83%
DiamondRock Hospitality	5.69%	4.04%	2.05%

Insider & Institutional Ownership

98.5% of Host Hotels & Resorts shares are owned by institutional investors. 1.5% of Host Hotels & Resorts shares are owned by insiders. Comparatively, 0.9% of DiamondRock Hospitality 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.

Dividends

Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 3.1%. DiamondRock Hospitality pays an annual dividend of $0.44 per share and has a dividend yield of 3.0%. Host Hotels & Resorts pays out 53.3% of its earnings in the form of a dividend. DiamondRock Hospitality pays out 60.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Host Hotels & Resorts has raised its dividend for 2 consecutive years and DiamondRock Hospitality has raised its dividend for 1 consecutive years. Host Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Host Hotels & Resorts and DiamondRock Hospitality”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Host Hotels & Resorts	$6.11 billion	2.88	$765.00 million	$1.50	17.13
DiamondRock Hospitality	$1.14 billion	2.60	$48.05 million	$0.73	19.81

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

Risk & Volatility

Host Hotels & Resorts has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, DiamondRock Hospitality has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Summary

Host Hotels & Resorts beats DiamondRock Hospitality on 17 of the 18 factors compared between the two stocks.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil, and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.