Summit Industrial Income REIT (OTCMKTS:SMMCF) & Sotherly Hotels (NASDAQ:SOHO) Critical Contrast

Sotherly Hotels (NASDAQ:SOHO) and Summit Industrial Income REIT (OTCMKTS:SMMCF) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Insider and Institutional Ownership

27.5% of Sotherly Hotels shares are owned by institutional investors. Comparatively, 0.1% of Summit Industrial Income REIT shares are owned by institutional investors. 15.9% of Sotherly Hotels shares are owned by company 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.

Dividends

Sotherly Hotels pays an annual dividend of $0.52 per share and has a dividend yield of 71.2%. Summit Industrial Income REIT pays an annual dividend of $0.21 per share and has a dividend yield of 1.2%. Sotherly Hotels pays out -148.6% of its earnings in the form of a dividend. Summit Industrial Income REIT pays out 35.9% 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. Sotherly Hotels is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations and price targets for Sotherly Hotels and Summit Industrial Income REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	1	0	0	2.00
Summit Industrial Income REIT	0	0	0	0	0.00

Sotherly Hotels presently has a consensus target price of $1.50, suggesting a potential upside of 105.48%. Given Sotherly Hotels’ stronger consensus rating and higher probable upside, research analysts plainly believe Sotherly Hotels is more favorable than Summit Industrial Income REIT.

Earnings & Valuation

This table compares Sotherly Hotels and Summit Industrial Income REIT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$181.89 million	0.08	$3.94 million	($0.35)	-2.09
Summit Industrial Income REIT	N/A	N/A	N/A	$0.59	29.50

Sotherly Hotels has higher revenue and earnings than Summit Industrial Income REIT. Sotherly Hotels is trading at a lower price-to-earnings ratio than Summit Industrial Income REIT, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sotherly Hotels and Summit Industrial Income REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	0.92%	3.48%	0.41%
Summit Industrial Income REIT	N/A	N/A	N/A

Summary

Sotherly Hotels beats Summit Industrial Income REIT on 10 of the 12 factors compared between the two stocks.

About Sotherly Hotels

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. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

About Summit Industrial Income REIT

Summit Industrial Income REIT is an open-ended mutual fund trust, which engages in growing and managing a portfolio of light industrial properties. Its properties are located in Ontario, Quebec, Alberta, British Columbia, and New Brunswick. The company was founded on November 24, 1998 and is headquartered in Markham, Canada.