Critical Contrast: CubeSmart (NYSE:CUBE) versus Xenia Hotels & Resorts (NYSE:XHR)

CubeSmart (NYSE:CUBE) and Xenia Hotels & Resorts (NYSE:XHR) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Valuation and Earnings

This table compares CubeSmart and Xenia Hotels & Resorts”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CubeSmart	$1.12 billion	7.90	$333.78 million	$1.45	26.85
Xenia Hotels & Resorts	$1.08 billion	1.36	$63.09 million	$0.64	24.90

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

Profitability

This table compares CubeSmart and Xenia Hotels & Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CubeSmart	29.72%	11.84%	4.97%
Xenia Hotels & Resorts	5.85%	5.13%	2.21%

Insider & Institutional Ownership

97.6% of CubeSmart shares are owned by institutional investors. Comparatively, 92.4% of Xenia Hotels & Resorts shares are owned by institutional investors. 1.7% of CubeSmart shares are owned by company insiders. Comparatively, 4.4% of Xenia Hotels & Resorts shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

CubeSmart has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Xenia Hotels & Resorts has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Dividends

CubeSmart pays an annual dividend of $2.12 per share and has a dividend yield of 5.4%. Xenia Hotels & Resorts pays an annual dividend of $0.56 per share and has a dividend yield of 3.5%. CubeSmart pays out 146.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Xenia Hotels & Resorts pays out 87.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart has raised its dividend for 16 consecutive years and Xenia Hotels & Resorts has raised its dividend for 3 consecutive years. CubeSmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for CubeSmart and Xenia Hotels & Resorts, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CubeSmart	0	10	6	0	2.38
Xenia Hotels & Resorts	1	0	3	0	2.50

CubeSmart presently has a consensus target price of $43.64, suggesting a potential upside of 12.09%. Xenia Hotels & Resorts has a consensus target price of $14.50, suggesting a potential downside of 9.00%. Given CubeSmart’s higher possible upside, analysts plainly believe CubeSmart is more favorable than Xenia Hotels & Resorts.

Summary

CubeSmart beats Xenia Hotels & Resorts on 13 of the 17 factors compared between the two stocks.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

About Xenia Hotels & Resorts

Xenia Hotels & Resorts, Inc. is a real estate investment trust, which engages in the provision of investment in luxury and upper upscale hotels and resorts. It also owns a diversified portfolio of lodging properties operated by Marriott, Kimpton, Hyatt, Aston, Fairmong, and Loews. The company was founded in 2007 and is headquartered in Orlando, FL.