Head-To-Head Survey: Pebblebrook Hotel Trust (PEB) & FelCor Lodging Trust (FCH)

Pebblebrook Hotel Trust (NYSE: PEB) and FelCor Lodging Trust (NYSE:FCH) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Risk & Volatility

Pebblebrook Hotel Trust has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, FelCor Lodging Trust has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500.

Institutional & Insider Ownership

78.8% of FelCor Lodging Trust shares are held by institutional investors. 2.0% of Pebblebrook Hotel Trust shares are held by company insiders. Comparatively, 3.3% of FelCor Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Pebblebrook Hotel Trust pays an annual dividend of $1.52 per share and has a dividend yield of 4.4%. FelCor Lodging Trust pays an annual dividend of $0.24 per share and has a dividend yield of 3.3%. Pebblebrook Hotel Trust pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FelCor Lodging Trust pays out -51.1% of its earnings in the form of a dividend. Pebblebrook Hotel Trust has raised its dividend for 5 consecutive years. Pebblebrook Hotel Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Pebblebrook Hotel Trust and FelCor Lodging Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pebblebrook Hotel Trust 2 3 5 0 2.30
FelCor Lodging Trust 0 1 0 0 2.00

Pebblebrook Hotel Trust presently has a consensus target price of $36.19, indicating a potential upside of 4.98%. FelCor Lodging Trust has a consensus target price of $7.00, indicating a potential downside of 4.11%. Given Pebblebrook Hotel Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Pebblebrook Hotel Trust is more favorable than FelCor Lodging Trust.

Profitability

This table compares Pebblebrook Hotel Trust and FelCor Lodging Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pebblebrook Hotel Trust 12.98% 6.63% 3.78%
FelCor Lodging Trust -0.66% N/A -0.35%

Valuation & Earnings

This table compares Pebblebrook Hotel Trust and FelCor Lodging Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pebblebrook Hotel Trust $816.42 million 2.91 $73.70 million $1.28 26.93
FelCor Lodging Trust N/A N/A N/A ($0.47) -15.53

Pebblebrook Hotel Trust has higher revenue and earnings than FelCor Lodging Trust. FelCor Lodging Trust is trading at a lower price-to-earnings ratio than Pebblebrook Hotel Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Pebblebrook Hotel Trust beats FelCor Lodging Trust on 11 of the 15 factors compared between the two stocks.

Pebblebrook Hotel Trust Company Profile

Pebblebrook Hotel Trust is an internally managed hotel investment company. The Company is a real estate investment trust (REIT) that acquires and invests in hotel properties located primarily in cities of the United States. As of December 31, 2016, the Company owned 29 hotels with a total of 7,219 guest rooms. The hotels are located in the markets: Atlanta (Buckhead), Georgia; Boston, Massachusetts; Miami (Coral Gables), Florida; Minneapolis, Minnesota; Naples, Florida; Nashville, Tennessee; New York, New York; Philadelphia, Pennsylvania; Portland, Oregon; San Diego, California; San Francisco, California; Santa Monica, California; Seattle, Washington; Stevenson, Washington; Washington, D.C.; West Hollywood, California, and Los Angeles (Beverly Hills), California. The Company’s assets are held by, and all of the operations are conducted through, Pebblebrook Hotel, L.P. (the Operating Partnership).

FelCor Lodging Trust Company Profile

FelCor Lodging Trust Incorporated is a real estate investment trust (REIT). The Company, through its subsidiary, FelCor Lodging Limited Partnership, held ownership interests in 39 hotels with 11,500 rooms, as of December 31, 2016. The Company sells, acquires, rebrands and redevelops hotels. As of December 31, 2016, the Company’s hotels were located in 14 states of the United States. The Company holds a portfolio of hotels managed by Hilton Worldwide (Hilton); Wyndham Worldwide (Wyndham); Marriott International Inc. (Marriott); InterContinental Hotels Group (IHG); AccorHotels Group, Highgate Hotels (Highgate), SBE and Aimbridge Hospitality. The Company’s hotels include Embassy Suites Atlanta-Buckhead; DoubleTree Suites by Hilton Austin; Embassy Suites Birmingham; The Fairmont Copley Plaza, Boston; Wyndham Boston Beacon Hill; Embassy Suites Boston-Marlborough, and Sheraton Burlington Hotel & Conference Center.

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