Analyzing Smartstop Self Storage REIT (NYSE:SMA) & RLJ Lodging Trust (NYSE:RLJ)

RLJ Lodging Trust (NYSE:RLJ) and Smartstop Self Storage REIT (NYSE:SMA) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Earnings and Valuation

This table compares RLJ Lodging Trust and Smartstop Self Storage REIT”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLJ Lodging Trust	$1.35 billion	1.33	$28.51 million	($0.01)	-1,177.30
Smartstop Self Storage REIT	$281.14 million	6.64	-$1.55 million	$0.15	224.87

RLJ Lodging Trust has higher revenue and earnings than Smartstop Self Storage REIT. RLJ Lodging Trust is trading at a lower price-to-earnings ratio than Smartstop Self Storage REIT, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

92.3% of RLJ Lodging Trust shares are held by institutional investors. 3.7% of RLJ Lodging Trust shares are held by insiders. Comparatively, 5.5% of Smartstop Self Storage REIT shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares RLJ Lodging Trust and Smartstop Self Storage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLJ Lodging Trust	1.84%	1.37%	0.52%
Smartstop Self Storage REIT	4.38%	1.00%	0.54%

Dividends

RLJ Lodging Trust pays an annual dividend of $0.60 per share and has a dividend yield of 5.1%. Smartstop Self Storage REIT pays an annual dividend of $1.58 per share and has a dividend yield of 4.7%. RLJ Lodging Trust pays out -6,000.0% of its earnings in the form of a dividend. Smartstop Self Storage REIT pays out 1,053.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust has raised its dividend for 3 consecutive years. RLJ Lodging Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

RLJ Lodging Trust has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Smartstop Self Storage REIT has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for RLJ Lodging Trust and Smartstop Self Storage REIT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLJ Lodging Trust	2	5	2	0	2.00
Smartstop Self Storage REIT	1	3	4	2	2.70

RLJ Lodging Trust currently has a consensus target price of $10.56, suggesting a potential downside of 10.28%. Smartstop Self Storage REIT has a consensus target price of $36.81, suggesting a potential upside of 9.14%. Given Smartstop Self Storage REIT’s stronger consensus rating and higher probable upside, analysts plainly believe Smartstop Self Storage REIT is more favorable than RLJ Lodging Trust.

Summary

Smartstop Self Storage REIT beats RLJ Lodging Trust on 10 of the 18 factors compared between the two stocks.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

About Smartstop Self Storage REIT

Symmetry Medical Inc. (Symmetry) is a medical device solutions company, including surgical instruments, orthopedic implants, and sterilization cases and trays. The Company designs, develops and offers worldwide production and supply chain capabilities for these products to customers in the orthopedic industry, and other medical device markets (including but not limited to arthroscopy, dental, laparoscopy, osteobiologic, and endoscopy segments). It also manufactures specialized non-healthcare products, primarily in the aerospace industry. The Company operates in two segments: original equipment manufacturer (OEM) solutions and symmetry surgical. On August 15, 2011, the Company acquired PSC Industries, Inc’s Olsen Medical division. On December 29, 2011 it acquired the surgical instruments product portfolio from Codman & Shurtleff, Inc., a Johnson & Johnson Company.