Financial Review: Xenia Hotels & Resorts (NYSE:XHR) and Granite Real Estate (NYSE:GRP.U)

Xenia Hotels & Resorts (NYSE:XHR) and Granite Real Estate (NYSE:GRP.U) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Institutional and Insider Ownership

92.4% of Xenia Hotels & Resorts shares are held by institutional investors. Comparatively, 57.1% of Granite Real Estate shares are held by institutional investors. 3.2% of Xenia Hotels & Resorts shares are held by company insiders. Comparatively, 0.3% of Granite Real Estate shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Xenia Hotels & Resorts pays an annual dividend of $0.56 per share and has a dividend yield of 3.9%. Granite Real Estate pays an annual dividend of $0.20 per share and has a dividend yield of 0.4%. Xenia Hotels & Resorts pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Real Estate pays out 5.2% of its earnings in the form of a dividend. Xenia Hotels & Resorts has raised its dividend for 3 consecutive years. Xenia Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Xenia Hotels & Resorts and Granite Real Estate’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xenia Hotels & Resorts	5.86%	4.95%	2.19%
Granite Real Estate	56.61%	6.01%	3.52%

Valuation & Earnings

This table compares Xenia Hotels & Resorts and Granite Real Estate”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xenia Hotels & Resorts	$1.04 billion	1.32	$16.14 million	$0.63	22.77
Granite Real Estate	$415.37 million	8.11	$263.17 million	$3.86	14.41

Granite Real Estate has lower revenue, but higher earnings than Xenia Hotels & Resorts. Granite Real Estate is trading at a lower price-to-earnings ratio than Xenia Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Xenia Hotels & Resorts and Granite Real Estate, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xenia Hotels & Resorts	1	1	3	0	2.40
Granite Real Estate	0	0	0	0	0.00

Xenia Hotels & Resorts currently has a consensus price target of $13.20, suggesting a potential downside of 7.98%. Given Xenia Hotels & Resorts’ stronger consensus rating and higher probable upside, analysts clearly believe Xenia Hotels & Resorts is more favorable than Granite Real Estate.

Summary

Xenia Hotels & Resorts beats Granite Real Estate on 9 of the 16 factors compared between the two stocks.

About Xenia Hotels & Resorts

Xenia Hotels & Resorts, Inc. is a real estate investment trust, which engages in the provision of investment in luxury and upper upscale hotels and resorts. It also owns a diversified portfolio of lodging properties operated by Marriott, Kimpton, Hyatt, Aston, Fairmong, and Loews. The company was founded in 2007 and is headquartered in Orlando, FL.

About Granite Real Estate

Granite Real Estate Investment Trust is engaged in the ownership and management of predominantly industrial properties in Canada, the United States, Mexico and Europe. The Company owns and manages rental income properties. Its services include sourcing and real estate acquisition, site development, assisting with government approvals and re-zoning to specific uses, build-to-suit construction, property renovation, project management and long-term leasing. Granite Real Estate Investment Trust, formerly known as Granite Real Estate Inc., is based in Toronto, Canada.