Orion Office REIT (NYSE:ONL) & BRAEMAR HOTELS & RESORTS (NYSE:BHR) Financial Analysis

Orion Office REIT (NYSE:ONL) and BRAEMAR HOTELS & RESORTS (NYSE:BHR) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Orion Office REIT and BRAEMAR HOTELS & RESORTS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion Office REIT	1	1	1	0	2.00
BRAEMAR HOTELS & RESORTS	1	1	0	0	1.50

Orion Office REIT currently has a consensus target price of $3.00, suggesting a potential upside of 3.99%. Given Orion Office REIT’s stronger consensus rating and higher possible upside, research analysts plainly believe Orion Office REIT is more favorable than BRAEMAR HOTELS & RESORTS.

Dividends

Orion Office REIT pays an annual dividend of $0.08 per share and has a dividend yield of 2.8%. BRAEMAR HOTELS & RESORTS pays an annual dividend of $0.20 per share and has a dividend yield of 7.2%. Orion Office REIT pays out -3.2% of its earnings in the form of a dividend. BRAEMAR HOTELS & RESORTS pays out -20.8% 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. BRAEMAR HOTELS & RESORTS is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Orion Office REIT and BRAEMAR HOTELS & RESORTS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion Office REIT	$147.65 million	1.11	-$139.31 million	($2.49)	-1.16
BRAEMAR HOTELS & RESORTS	$697.18 million	0.27	-$22.32 million	($0.96)	-2.90

BRAEMAR HOTELS & RESORTS has higher revenue and earnings than Orion Office REIT. BRAEMAR HOTELS & RESORTS is trading at a lower price-to-earnings ratio than Orion Office REIT, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

80.0% of Orion Office REIT shares are owned by institutional investors. Comparatively, 64.8% of BRAEMAR HOTELS & RESORTS shares are owned by institutional investors. 1.6% of Orion Office REIT shares are owned by insiders. Comparatively, 8.2% of BRAEMAR HOTELS & RESORTS shares are owned by 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.

Profitability

This table compares Orion Office REIT and BRAEMAR HOTELS & RESORTS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orion Office REIT	-94.35%	-20.13%	-11.12%
BRAEMAR HOTELS & RESORTS	-2.24%	-8.21%	-0.79%

Volatility and Risk

Orion Office REIT has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500. Comparatively, BRAEMAR HOTELS & RESORTS has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Summary

BRAEMAR HOTELS & RESORTS beats Orion Office REIT on 9 of the 16 factors compared between the two stocks.

About Orion Office REIT

Orion Office REIT specializes in the ownership, acquisition and management of a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S. The portfolio is leased primarily on a single-tenant net lease basis to creditworthy tenants. The company's team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.

About BRAEMAR HOTELS & RESORTS

Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).