Critical Review: Ashford Hospitality Trust (NYSE:AHT) and Sotherly Hotels (NASDAQ:SOHON)

Sotherly Hotels (NASDAQ:SOHON) and Ashford Hospitality Trust (NYSE:AHT) are both real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Insider and Institutional Ownership

41.0% of Ashford Hospitality Trust shares are owned by institutional investors. 1.2% of Ashford Hospitality Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Sotherly Hotels and Ashford Hospitality Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	0	0	0	N/A
Ashford Hospitality Trust	0	1	0	0	2.00

Ashford Hospitality Trust has a consensus price target of $25.00, indicating a potential upside of 275.94%. Given Ashford Hospitality Trust’s higher possible upside, analysts plainly believe Ashford Hospitality Trust is more favorable than Sotherly Hotels.

Valuation and Earnings

This table compares Sotherly Hotels and Ashford Hospitality Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$178.57 million	N/A	N/A	N/A	N/A
Ashford Hospitality Trust	$1.37 billion	0.02	-$178.49 million	($20.40)	-0.33

Sotherly Hotels has higher earnings, but lower revenue than Ashford Hospitality Trust.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	N/A	N/A	N/A
Ashford Hospitality Trust	2.25%	-10.52%	0.82%

Summary

Ashford Hospitality Trust beats Sotherly Hotels on 6 of the 7 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 Ashford Hospitality Trust

Ashford Hospitality Trust, Inc., together with its subsidiaries (Ashford Trust), is a real estate investment trust (REIT). While our portfolio currently consists of upscale hotels and upper upscale full-service hotels, our investment strategy is predominantly focused on investing in upper upscale full-service hotels in the United States that have revenue per available room (RevPAR) generally less than twice the U.S. national average, and in all methods including direct real estate, equity, and debt. We currently anticipate future investments will predominantly be in upper upscale hotels. We own our lodging investments and conduct our business through Ashford Hospitality Limited Partnership (Ashford Trust OP), our operating partnership. Ashford OP General Partner LLC, a wholly owned subsidiary of Ashford Trust, serves as the sole general partner of our operating partnership.