Host Hotels & Resorts (HST) and Diamondrock Hospitality (DRH) Head to Head Survey

Host Hotels & Resorts (NYSE: HST) and Diamondrock Hospitality (NYSE:DRH) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

Host Hotels & Resorts has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Diamondrock Hospitality has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Profitability

This table compares Host Hotels & Resorts and Diamondrock Hospitality’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Host Hotels & Resorts 11.09% 8.47% 5.16%
Diamondrock Hospitality 11.47% 5.41% 3.23%

Analyst Ratings

This is a summary of current recommendations and price targets for Host Hotels & Resorts and Diamondrock Hospitality, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Host Hotels & Resorts 1 8 5 0 2.29
Diamondrock Hospitality 3 4 6 0 2.23

Host Hotels & Resorts presently has a consensus target price of $18.11, suggesting a potential downside of 1.88%. Diamondrock Hospitality has a consensus target price of $11.50, suggesting a potential upside of 6.88%. Given Diamondrock Hospitality’s higher probable upside, analysts plainly believe Diamondrock Hospitality is more favorable than Host Hotels & Resorts.

Dividends

Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.3%. Diamondrock Hospitality pays an annual dividend of $0.50 per share and has a dividend yield of 4.6%. Host Hotels & Resorts pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diamondrock Hospitality pays out 102.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts has increased its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Host Hotels & Resorts and Diamondrock Hospitality’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Host Hotels & Resorts $5.45 billion 2.51 $1.45 billion $0.80 23.08
Diamondrock Hospitality $866.34 million 2.49 $242.01 million $0.49 21.96

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

Summary

Host Hotels & Resorts beats Diamondrock Hospitality on 9 of the 15 factors compared between the two stocks.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. (Host Inc.) operates as a self-managed and self-administered real estate investment trust (REIT). The Company operates through hotel ownership segment. The Company operates through hotel ownership segment. The Company owned properties and conducted operations through Host Hotels & Resorts, L.P. (Host L.P.), of which Host Inc. was the general partner and of which it held approximately 99% of the partnership interests (OP units), as of December 31, 2016. As of February 20, 2017, its lodging portfolio consisted of 96 primarily luxury and upper-upscale hotels containing approximately 53,500 rooms, with the majority located in the United States, and with seven of the properties located outside of the United States in Australia, Brazil, Canada and Mexico. In addition, it owns non-controlling interests in two international joint ventures: approximately a 33% interest in a joint venture in Europe, and a 9% indirect interest, through joint ventures in India.

About Diamondrock Hospitality

DiamondRock Hospitality Company is a real estate investment trust (REIT). As of December 31, 2016, the Company owned a portfolio of 26 hotels and resorts that contains 9,472 guest rooms located in 17 different markets in North America and the United States Virgin Islands. Its business is to acquire, own, asset manage and renovate hotel properties in the United States. Its portfolio is concentrated in gateway cities and destination resort locations. It conducts its business through an umbrella partnership REIT (UPREIT) in, which its hotels are owned by subsidiaries of its operating partnership, DiamondRock Hospitality Limited Partnership. The Company is the general partner of its operating partnership and owns, either directly or indirectly, all of the limited partnership units of its operating partnership. The Company leases all of its domestic hotels to taxable REIT subsidiary, Bloodstone TRS, Inc. (TRS) lessees.

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