Sotherly Hotels (NASDAQ:SOHO) vs. Lineage (NASDAQ:LINE) Critical Review

Sotherly Hotels (NASDAQ:SOHO) and Lineage (NASDAQ:LINE) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Profitability

This table compares Sotherly Hotels and Lineage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	1.88%	6.82%	0.84%
Lineage	N/A	N/A	N/A

Dividends

Sotherly Hotels pays an annual dividend of $0.52 per share and has a dividend yield of 39.7%. Lineage pays an annual dividend of $1.52 per share and has a dividend yield of 1.9%. Sotherly Hotels pays out -247.6% of its earnings in the form of a dividend. Lineage pays out -11.1% 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. Sotherly Hotels is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

27.5% of Sotherly Hotels shares are held by institutional investors. Comparatively, 3.3% of Lineage shares are held by institutional investors. 15.9% of Sotherly Hotels shares are held by company insiders. Comparatively, 1.4% of Lineage shares are held by company 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.

Analyst Recommendations

This is a summary of current ratings and target prices for Sotherly Hotels and Lineage, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	1	0	0	2.00
Lineage	0	5	11	1	2.76

Sotherly Hotels currently has a consensus target price of $1.50, suggesting a potential upside of 14.50%. Lineage has a consensus target price of $93.63, suggesting a potential upside of 15.66%. Given Lineage’s stronger consensus rating and higher probable upside, analysts clearly believe Lineage is more favorable than Sotherly Hotels.

Earnings & Valuation

This table compares Sotherly Hotels and Lineage”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$178.57 million	0.15	$3.94 million	($0.21)	-6.24
Lineage	$5.33 billion	3.46	-$3.11 billion	($13.67)	-5.92

Sotherly Hotels has higher earnings, but lower revenue than Lineage. Sotherly Hotels is trading at a lower price-to-earnings ratio than Lineage, indicating that it is currently the more affordable of the two stocks.

Summary

Sotherly Hotels beats Lineage on 9 of the 16 factors compared between the two stocks.

About Sotherly Hotels

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

About Lineage

Lineage, Inc. is the world’s largest global temperature-controlled warehouse REIT with a network of over 480 strategically located facilities totaling over 84.1 million square feet and 3.0 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific. Coupling end-to-end supply chain solutions and technology, Lineage partners with some of the world’s largest food and beverage producers, retailers, and distributors to help increase distribution efficiency, advance sustainability, minimize supply chain waste, and, most importantly, feed the world.