Analyzing QTS Realty Trust (NYSE:QTS) and Summit Hotel Properties (NYSE:INN)

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Summit Hotel Properties (NYSE:INN) and QTS Realty Trust (NYSE:QTS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Risk and Volatility

Summit Hotel Properties has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, QTS Realty Trust has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Valuation and Earnings

This table compares Summit Hotel Properties and QTS Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit Hotel Properties $567.27 million 2.16 $90.92 million $1.35 8.63
QTS Realty Trust $450.52 million 5.95 -$4.46 million $2.60 18.65

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

Dividends

Summit Hotel Properties pays an annual dividend of $0.72 per share and has a dividend yield of 6.2%. QTS Realty Trust pays an annual dividend of $1.76 per share and has a dividend yield of 3.6%. Summit Hotel Properties pays out 53.3% of its earnings in the form of a dividend. QTS Realty Trust pays out 67.7% 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. Summit Hotel Properties has increased its dividend for 5 consecutive years and QTS Realty Trust has increased its dividend for 4 consecutive years. Summit Hotel Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Summit Hotel Properties and QTS Realty Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Hotel Properties 1 1 3 0 2.40
QTS Realty Trust 0 1 6 0 2.86

Summit Hotel Properties presently has a consensus target price of $13.50, indicating a potential upside of 15.88%. QTS Realty Trust has a consensus target price of $49.17, indicating a potential upside of 1.37%. Given Summit Hotel Properties’ higher probable upside, analysts plainly believe Summit Hotel Properties is more favorable than QTS Realty Trust.

Profitability

This table compares Summit Hotel Properties and QTS Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Hotel Properties 18.95% 8.82% 4.77%
QTS Realty Trust 6.19% 2.95% 0.97%

Summary

Summit Hotel Properties beats QTS Realty Trust on 10 of the 15 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 hotels with efficient operating models primarily in the upscale segment of the lodging industry. As of April 18, 2019, the Company's portfolio consisted of 69 hotels with a total of 10,714 guestrooms located in 24 states.

About QTS Realty Trust

QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega scale data center space throughout North America. Through its software-defined technology platform, QTS is able to deliver secure, compliant infrastructure solutions, robust connectivity and premium customer service to leading hyperscale technology companies, enterprises, and government entities. QTS owns, operates or manages 25 data centers and supports more than 1,100 Core customers primarily in North America.

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