Analyzing Chatham Lodging Trust (NYSE:CLDT) & SBA Communications (NASDAQ:SBAC)

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for SBA Communications and Chatham Lodging Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SBA Communications	0	9	8	1	2.56
Chatham Lodging Trust	0	3	2	0	2.40

SBA Communications presently has a consensus target price of $236.39, suggesting a potential upside of 28.08%. Chatham Lodging Trust has a consensus target price of $12.50, suggesting a potential downside of 3.94%. Given SBA Communications’ stronger consensus rating and higher probable upside, research analysts clearly believe SBA Communications is more favorable than Chatham Lodging Trust.

Dividends

SBA Communications pays an annual dividend of $5.00 per share and has a dividend yield of 2.7%. Chatham Lodging Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.1%. SBA Communications pays out 52.6% of its earnings in the form of a dividend. Chatham Lodging Trust pays out 2,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SBA Communications has increased its dividend for 6 consecutive years and Chatham Lodging Trust has increased its dividend for 2 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SBA Communications	35.66%	-20.90%	8.98%
Chatham Lodging Trust	3.14%	1.18%	0.77%

Volatility and Risk

SBA Communications has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Chatham Lodging Trust has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Earnings and Valuation

This table compares SBA Communications and Chatham Lodging Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SBA Communications	$2.82 billion	6.95	$1.05 billion	$9.50	19.43
Chatham Lodging Trust	$295.08 million	2.06	$15.05 million	$0.02	650.65

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

Insider and Institutional Ownership

97.3% of SBA Communications shares are owned by institutional investors. Comparatively, 88.4% of Chatham Lodging Trust shares are owned by institutional investors. 9.5% of SBA Communications shares are owned by company insiders. Comparatively, 8.1% of Chatham Lodging Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

SBA Communications beats Chatham Lodging Trust on 14 of the 18 factors compared between the two stocks.

About SBA Communications

SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 39,000 communications sites throughout the Americas, Africa and in Asia, SBA is listed on NASDAQ under the symbol SBAC. Our organization is part of the S&P 500 and is one of the top Real Estate Investment Trusts (REITs) by market capitalization.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia.