Comparing Chatham Lodging Trust (CLDT) and HCP (HCP)

Chatham Lodging Trust (NYSE:CLDT) and HCP (NYSE:HCP) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Profitability

This table compares Chatham Lodging Trust and HCP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chatham Lodging Trust 11.28% 4.46% 2.60%
HCP 9.16% 3.06% 1.24%

Risk & Volatility

Chatham Lodging Trust has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, HCP has a beta of 0.16, indicating that its share price is 84% less volatile than the S&P 500.

Valuation and Earnings

This table compares Chatham Lodging Trust and HCP’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chatham Lodging Trust $298.86 million 3.10 $29.47 million $2.14 9.32
HCP $1.85 billion 7.33 $414.16 million $1.95 14.78

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

Institutional & Insider Ownership

82.5% of Chatham Lodging Trust shares are owned by institutional investors. Comparatively, 87.6% of HCP shares are owned by institutional investors. 3.4% of Chatham Lodging Trust shares are owned by company insiders. Comparatively, 0.1% of HCP shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Chatham Lodging Trust and HCP, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chatham Lodging Trust 0 4 0 0 2.00
HCP 2 8 5 0 2.20

Chatham Lodging Trust currently has a consensus price target of $20.75, suggesting a potential upside of 4.06%. HCP has a consensus price target of $26.75, suggesting a potential downside of 7.18%. Given Chatham Lodging Trust’s higher possible upside, equities research analysts plainly believe Chatham Lodging Trust is more favorable than HCP.

Dividends

Chatham Lodging Trust pays an annual dividend of $1.32 per share and has a dividend yield of 6.6%. HCP pays an annual dividend of $1.48 per share and has a dividend yield of 5.1%. Chatham Lodging Trust pays out 61.7% of its earnings in the form of a dividend. HCP pays out 75.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust has raised its dividend for 3 consecutive years. Chatham Lodging Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Chatham Lodging Trust beats HCP on 10 of the 17 factors compared between the two stocks.

Chatham Lodging Trust Company Profile

Chatham Lodging Trust is a self-advised, publicly-traded real estate investment trust focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns interests in 135 hotels totaling 18,518 rooms/suites, comprised of 40 properties it wholly owns with an aggregate of 6,020 rooms/suites in 15 states and the District of Columbia and a minority investment in two joint ventures that own 95 hotels with an aggregate of 12,498 rooms/suites.

HCP Company Profile

HCP, Inc. is a fully integrated real estate investment trust (REIT) that invests in real estate serving the healthcare industry in the United States. HCP owns a large-scale portfolio primarily diversified across life science, medical office and senior housing. Recognized as a global leader in sustainability, HCP has been a publicly-traded company since 1985 and was the first healthcare REIT selected to the S&P 500 index.

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