SOTHERLY HOTELS/SH SH (NASDAQ:SOHO) and NexPoint Residential Trust (NYSE:NXRT) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
This table compares SOTHERLY HOTELS/SH SH and NexPoint Residential Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SOTHERLY HOTELS/SH SH||0.06%||0.12%||0.02%|
|NexPoint Residential Trust||-1.09%||-0.63%||-0.14%|
SOTHERLY HOTELS/SH SH pays an annual dividend of $0.50 per share and has a dividend yield of 7.3%. NexPoint Residential Trust pays an annual dividend of $1.10 per share and has a dividend yield of 3.1%. SOTHERLY HOTELS/SH SH pays out 48.1% of its earnings in the form of a dividend. NexPoint Residential Trust pays out 58.5% 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/SH SH has raised its dividend for 5 consecutive years and NexPoint Residential Trust has raised its dividend for 3 consecutive years. SOTHERLY HOTELS/SH SH is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares SOTHERLY HOTELS/SH SH and NexPoint Residential Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SOTHERLY HOTELS/SH SH||$178.17 million||0.54||$110,000.00||$1.04||6.56|
|NexPoint Residential Trust||$146.60 million||5.78||-$1.60 million||$1.88||19.07|
SOTHERLY HOTELS/SH SH has higher revenue and earnings than NexPoint Residential Trust. SOTHERLY HOTELS/SH SH is trading at a lower price-to-earnings ratio than NexPoint Residential Trust, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
SOTHERLY HOTELS/SH SH has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for SOTHERLY HOTELS/SH SH and NexPoint Residential Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SOTHERLY HOTELS/SH SH||0||0||0||0||N/A|
|NexPoint Residential Trust||0||1||3||0||2.75|
NexPoint Residential Trust has a consensus target price of $37.25, indicating a potential upside of 3.91%. Given NexPoint Residential Trust’s higher possible upside, analysts clearly believe NexPoint Residential Trust is more favorable than SOTHERLY HOTELS/SH SH.
Institutional and Insider Ownership
30.0% of SOTHERLY HOTELS/SH SH shares are owned by institutional investors. Comparatively, 66.2% of NexPoint Residential Trust shares are owned by institutional investors. 14.4% of SOTHERLY HOTELS/SH SH shares are owned by company insiders. Comparatively, 20.0% of NexPoint Residential Trust shares are owned 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.
SOTHERLY HOTELS/SH SH beats NexPoint Residential Trust on 9 of the 16 factors compared between the two stocks.
SOTHERLY HOTELS/SH SH Company Profile
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. Currently, the Company's portfolio consists of investments in twelve hotel properties, comprising 3,156 rooms, and an interest in the Hyde Resort & Residences, a luxury condo hotel. The Company owns hotels that operate under the Hilton Worldwide, InterContinental Hotels Group and Marriott International, Inc. brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.
NexPoint Residential Trust Company Profile
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser.
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