Prologis (NYSE:PLD) versus DiamondRock Hospitality (NYSE:DRH) Critical Contrast

DiamondRock Hospitality (NYSE:DRH) and Prologis (NYSE:PLD) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Dividends

DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. Prologis pays an annual dividend of $3.84 per share and has a dividend yield of 3.0%. DiamondRock Hospitality pays out 33.3% of its earnings in the form of a dividend. Prologis pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Prologis has increased its dividend for 11 consecutive years. Prologis is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares DiamondRock Hospitality and Prologis’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DiamondRock Hospitality	$1.07 billion	1.85	$86.34 million	$0.36	26.42
Prologis	$8.02 billion	14.66	$3.06 billion	$3.29	38.64

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

Volatility & Risk

DiamondRock Hospitality has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, Prologis has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares DiamondRock Hospitality and Prologis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DiamondRock Hospitality	8.03%	5.29%	2.68%
Prologis	38.13%	5.29%	3.34%

Analyst Ratings

This is a summary of current ratings and target prices for DiamondRock Hospitality and Prologis, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DiamondRock Hospitality	0	4	2	0	2.33
Prologis	0	3	10	1	2.86

DiamondRock Hospitality presently has a consensus price target of $9.92, indicating a potential upside of 4.28%. Prologis has a consensus price target of $142.47, indicating a potential upside of 12.05%. Given Prologis’ stronger consensus rating and higher probable upside, analysts clearly believe Prologis is more favorable than DiamondRock Hospitality.

Insider & Institutional Ownership

93.5% of Prologis shares are owned by institutional investors. 1.4% of DiamondRock Hospitality shares are owned by company insiders. Comparatively, 0.7% of Prologis shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Prologis beats DiamondRock Hospitality on 14 of the 17 factors compared between the two stocks.

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.

About Prologis

Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. At December 31, 2023, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.2 billion square feet (115 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 6,700 customers principally across two major categories: business-to-business and retail/online fulfillment.