Critical Contrast: Ryman Hospitality Properties (NYSE:RHP) & DiamondRock Hospitality (NYSE:DRH)

DiamondRock Hospitality (NYSE:DRH) and Ryman Hospitality Properties (NYSE:RHP) are both mid-cap real estate companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DiamondRock Hospitality	5.69%	4.04%	2.05%
Ryman Hospitality Properties	9.88%	29.45%	4.23%

Analyst Ratings

This is a summary of current ratings and recommmendations for DiamondRock Hospitality and Ryman Hospitality Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DiamondRock Hospitality	0	7	4	0	2.36
Ryman Hospitality Properties	0	2	12	0	2.86

DiamondRock Hospitality currently has a consensus price target of $13.03, indicating a potential downside of 9.55%. Ryman Hospitality Properties has a consensus price target of $136.67, indicating a potential upside of 1.09%. Given Ryman Hospitality Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Ryman Hospitality Properties is more favorable than DiamondRock Hospitality.

Dividends

DiamondRock Hospitality pays an annual dividend of $0.44 per share and has a dividend yield of 3.1%. Ryman Hospitality Properties pays an annual dividend of $4.80 per share and has a dividend yield of 3.6%. DiamondRock Hospitality pays out 55.7% of its earnings in the form of a dividend. Ryman Hospitality Properties pays out 115.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DiamondRock Hospitality has increased its dividend for 1 consecutive years and Ryman Hospitality Properties has increased its dividend for 2 consecutive years. Ryman Hospitality Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

94.5% of Ryman Hospitality Properties shares are held by institutional investors. 0.9% of DiamondRock Hospitality shares are held by insiders. Comparatively, 3.2% of Ryman Hospitality Properties shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares DiamondRock Hospitality and Ryman Hospitality Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DiamondRock Hospitality	$1.15 billion	2.57	$48.05 million	$0.79	18.23
Ryman Hospitality Properties	$2.58 billion	3.62	$243.43 million	$4.14	32.66

Ryman Hospitality Properties has higher revenue and earnings than DiamondRock Hospitality. DiamondRock Hospitality 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 & Risk

DiamondRock Hospitality has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Ryman Hospitality Properties has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Summary

Ryman Hospitality Properties beats DiamondRock Hospitality on 15 of the 17 factors compared between the two stocks.

About DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust focused on owning upscale hotels and resorts in the United States. The company’s properties serve both business and leisure travelers and are managed by third-party hotel operators. Its portfolio includes hotels in major urban and gateway markets as well as leisure destinations. Properties operate under a range of well-known hotel brands, including Marriott, Hilton and Hyatt, alongside independent brands. DiamondRock was founded in 2004 and became a publicly traded company in 2005.

About Ryman Hospitality Properties

Ryman Hospitality Properties, Inc. is a real estate investment trust focused on upscale hotels and resorts designed for conventions and large group events. Its portfolio includes the Gaylord Hotels properties in Nashville, Tennessee; Orlando, Florida; Grapevine, Texas; National Harbor, Maryland; and Aurora, Colorado. These destination resorts combine lodging with extensive meeting and convention facilities, dining, and entertainment. The company also owns and operates entertainment venues and related businesses through Opry Entertainment Group.