Starwood Property Trust (NYSE:STWD) and Braemar Hotels & Resorts (NYSE:BHR) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.
Risk and Volatility
Starwood Property Trust has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Braemar Hotels & Resorts has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.
62.8% of Starwood Property Trust shares are owned by institutional investors. Comparatively, 73.7% of Braemar Hotels & Resorts shares are owned by institutional investors. 3.1% of Starwood Property Trust shares are owned by company insiders. Comparatively, 8.9% of Braemar Hotels & Resorts shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This is a summary of current ratings and target prices for Starwood Property Trust and Braemar Hotels & Resorts, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Property Trust||0||0||2||0||3.00|
|Braemar Hotels & Resorts||0||1||3||0||2.75|
Starwood Property Trust currently has a consensus target price of $26.00, suggesting a potential upside of 7.17%. Braemar Hotels & Resorts has a consensus target price of $13.67, suggesting a potential upside of 48.39%. Given Braemar Hotels & Resorts’ higher probable upside, analysts plainly believe Braemar Hotels & Resorts is more favorable than Starwood Property Trust.
Earnings and Valuation
This table compares Starwood Property Trust and Braemar Hotels & Resorts’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Starwood Property Trust||$1.11 billion||6.16||$385.83 million||$2.11||11.50|
|Braemar Hotels & Resorts||$431.40 million||0.70||$1.32 million||$1.55||5.94|
Starwood Property Trust has higher revenue and earnings than Braemar Hotels & Resorts. Braemar Hotels & Resorts is trading at a lower price-to-earnings ratio than Starwood Property Trust, indicating that it is currently the more affordable of the two stocks.
Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 7.9%. Braemar Hotels & Resorts pays an annual dividend of $0.64 per share and has a dividend yield of 6.9%. Starwood Property Trust pays out 91.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Braemar Hotels & Resorts pays out 41.3% of its earnings in the form of a dividend.
This table compares Starwood Property Trust and Braemar Hotels & Resorts’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Starwood Property Trust||31.15%||10.51%||0.75%|
|Braemar Hotels & Resorts||-5.86%||-7.26%||-1.57%|
Starwood Property Trust beats Braemar Hotels & Resorts on 10 of the 16 factors compared between the two stocks.
About Starwood Property Trust
Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and Europe. It operates through three segments: Real Estate Lending, Real Estate Property, and Real Estate Investing and Servicing. The Real Estate Lending segment originates, acquires, finances, and manages commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, residential mortgage loans, and other real estate and real estate-related debt investments. The Real Estate Property segment acquires and manages equity interests in commercial real estate properties, including multi-family properties. The Real Estate Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS, including subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was founded in 2009 and is headquartered in Greenwich, Connecticut.
About Braemar Hotels & Resorts
Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).
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