Head to Head Analysis: Ryman Hospitality Properties (NYSE:RHP) and Invesco Mortgage Capital (NYSE:IVR)

Ryman Hospitality Properties (NYSE:RHP) and Invesco Mortgage Capital (NYSE:IVR) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Insider & Institutional Ownership

88.2% of Ryman Hospitality Properties shares are held by institutional investors. Comparatively, 65.1% of Invesco Mortgage Capital shares are held by institutional investors. 3.2% of Ryman Hospitality Properties shares are held by insiders. Comparatively, 0.2% of Invesco Mortgage Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Ryman Hospitality Properties pays an annual dividend of $3.80 per share and has a dividend yield of 11.9%. Invesco Mortgage Capital pays an annual dividend of $0.08 per share and has a dividend yield of 2.6%. Ryman Hospitality Properties pays out 55.4% of its earnings in the form of a dividend. Invesco Mortgage Capital pays out 4.2% 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. Ryman Hospitality Properties has increased its dividend for 6 consecutive years and Invesco Mortgage Capital has increased its dividend for 3 consecutive years. Ryman Hospitality Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Ryman Hospitality Properties and Invesco Mortgage Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ryman Hospitality Properties 2 1 3 0 2.17
Invesco Mortgage Capital 4 0 0 0 1.00

Ryman Hospitality Properties presently has a consensus target price of $45.67, indicating a potential upside of 42.62%. Invesco Mortgage Capital has a consensus target price of $2.38, indicating a potential downside of 22.64%. Given Ryman Hospitality Properties’ stronger consensus rating and higher possible upside, research analysts clearly believe Ryman Hospitality Properties is more favorable than Invesco Mortgage Capital.

Valuation and Earnings

This table compares Ryman Hospitality Properties and Invesco Mortgage Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ryman Hospitality Properties $1.60 billion 1.10 $145.79 million $6.86 4.67
Invesco Mortgage Capital $882.59 million 0.57 $364.10 million $1.92 1.60

Invesco Mortgage Capital has lower revenue, but higher earnings than Ryman Hospitality Properties. Invesco Mortgage Capital is trading at a lower price-to-earnings ratio than Ryman Hospitality Properties, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Ryman Hospitality Properties has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, Invesco Mortgage Capital has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Profitability

This table compares Ryman Hospitality Properties and Invesco Mortgage Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ryman Hospitality Properties 4.52% 14.32% 1.73%
Invesco Mortgage Capital 41.25% 16.63% 1.63%

Summary

Ryman Hospitality Properties beats Invesco Mortgage Capital on 12 of the 17 factors compared between the two stocks.

Ryman Hospitality Properties Company Profile

Ryman Hospitality Properties, Inc. (NYSE:RHP) is a REIT for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. The Company's owned assets include a network of four upscale, meetings-focused resorts totaling 8,114 rooms that are managed by lodging operator Marriott International, Inc. under the Gaylord Hotels brand. The Company is a joint venture owner of the 1,501-room Gaylord Rockies Resort & Convention Center, which is also managed by Marriott International, Inc. Other owned assets managed by Marriott International, Inc. include Gaylord Springs Golf Links, the Wildhorse Saloon, the General Jackson Showboat, The Inn at Opryland, a 303-room overflow hotel adjacent to Gaylord Opryland and AC Hotel Washington, DC at National Harbor, a 192-room hotel near Gaylord National. The Company also owns and operates media and entertainment assets, including the Grand Ole Opry (opry.com), the legendary weekly showcase of country music's finest performers for over 90 years; the Ryman Auditorium, the storied former home of the Grand Ole Opry located in downtown Nashville; 650 AM WSM, the Opry's radio home; and Ole Red, a country lifestyle and entertainment brand.

Invesco Mortgage Capital Company Profile

Invesco Mortgage Capital Inc. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential and commercial mortgage-backed securities, and other mortgage-related assets. It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by a U.S. government agency or federally chartered corporation; credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises; residential and commercial mortgage loans; and other real estate-related financing arrangements. Invesco Mortgage Capital Inc. has elected to be taxed as a REIT and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formally known as Invesco Agency Securities Inc. and changed its name to Invesco Mortgage Capital Inc. in June 2008. Invesco Mortgage Capital Inc. was incorporated in 2008 and is headquartered in Atlanta, Georgia.

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