SOTHERLY HOTELS/SH SH (NASDAQ:SOHO) and Western Asset Mortgage Capital (NYSE:WMC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.
Insider and Institutional Ownership
30.2% of SOTHERLY HOTELS/SH SH shares are held by institutional investors. Comparatively, 46.4% of Western Asset Mortgage Capital shares are held by institutional investors. 14.4% of SOTHERLY HOTELS/SH SH shares are held by company insiders. Comparatively, 0.5% of Western Asset Mortgage Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
SOTHERLY HOTELS/SH SH pays an annual dividend of $0.52 per share and has a dividend yield of 7.8%. Western Asset Mortgage Capital pays an annual dividend of $1.24 per share and has a dividend yield of 11.9%. SOTHERLY HOTELS/SH SH pays out 50.0% of its earnings in the form of a dividend. Western Asset Mortgage Capital pays out 91.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a summary of recent ratings and recommmendations for SOTHERLY HOTELS/SH SH and Western Asset Mortgage Capital, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SOTHERLY HOTELS/SH SH||0||0||0||0||N/A|
|Western Asset Mortgage Capital||0||1||1||0||2.50|
Western Asset Mortgage Capital has a consensus target price of $10.50, indicating a potential upside of 0.96%. Given Western Asset Mortgage Capital’s higher probable upside, analysts plainly believe Western Asset Mortgage Capital is more favorable than SOTHERLY HOTELS/SH SH.
Earnings & Valuation
This table compares SOTHERLY HOTELS/SH SH and Western Asset Mortgage Capital’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SOTHERLY HOTELS/SH SH||$178.17 million||0.53||$110,000.00||$1.04||6.38|
|Western Asset Mortgage Capital||$209.36 million||2.64||$26.41 million||$1.36||7.65|
Western Asset Mortgage Capital has higher revenue and earnings than SOTHERLY HOTELS/SH SH. SOTHERLY HOTELS/SH SH is trading at a lower price-to-earnings ratio than Western Asset Mortgage Capital, indicating that it is currently the more affordable of the two stocks.
This table compares SOTHERLY HOTELS/SH SH and Western Asset Mortgage Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SOTHERLY HOTELS/SH SH||0.46%||0.90%||0.17%|
|Western Asset Mortgage Capital||18.47%||11.66%||1.26%|
Risk and Volatility
SOTHERLY HOTELS/SH SH has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Western Asset Mortgage Capital has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.
Western Asset Mortgage Capital beats SOTHERLY HOTELS/SH SH on 13 of the 15 factors compared between the two stocks.
About SOTHERLY HOTELS/SH SH
Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Currently, the Company's portfolio consists of investments in twelve hotel properties, comprising 3,156 rooms, and an interest in the Hyde Resort & Residences, a luxury condo hotel. The Company owns hotels that operate under the Hilton Worldwide, InterContinental Hotels Group and Marriott International, Inc. brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.
About Western Asset Mortgage Capital
Western Asset Mortgage Capital Corporation operates as a real estate investment trust in the United States. It focuses on investing in, financing, and managing a portfolio of agency and non-agency residential mortgage-backed securities and commercial mortgage-backed securities, residential whole-loans, residential bridge loans, securitized commercial loans, and other financial assets. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2009 and is based in Pasadena, California.
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