DiamondRock Hospitality (NYSE:DRH) versus Rithm Capital (NYSE:RITM) Head to Head Analysis

DiamondRock Hospitality (NYSE:DRHGet Rating) and Rithm Capital (NYSE:RITMGet Rating) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Insider and Institutional Ownership

47.3% of Rithm Capital shares are held by institutional investors. 1.4% of DiamondRock Hospitality shares are held by company insiders. Comparatively, 0.7% of Rithm Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares DiamondRock Hospitality and Rithm Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DiamondRock Hospitality 9.40% 5.65% 2.80%
Rithm Capital 20.41% 12.83% 2.00%

Dividends

DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 11.1%. DiamondRock Hospitality pays out 33.3% of its earnings in the form of a dividend. Rithm Capital pays out 51.3% 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for DiamondRock Hospitality and Rithm Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DiamondRock Hospitality 1 3 3 0 2.29
Rithm Capital 0 1 4 0 2.80

DiamondRock Hospitality currently has a consensus target price of $10.50, indicating a potential upside of 17.98%. Rithm Capital has a consensus target price of $10.83, indicating a potential upside of 19.97%. Given Rithm Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Rithm Capital is more favorable than DiamondRock Hospitality.

Volatility and Risk

DiamondRock Hospitality has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.74, meaning that its stock price is 74% more volatile than the S&P 500.

Valuation & Earnings

This table compares DiamondRock Hospitality and Rithm Capital’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DiamondRock Hospitality $567.13 million 3.31 -$194.58 million $0.36 24.72
Rithm Capital $3.62 billion 1.18 $772.23 million $1.95 4.63

Rithm Capital has higher revenue and earnings than DiamondRock Hospitality. Rithm Capital is trading at a lower price-to-earnings ratio than DiamondRock Hospitality, indicating that it is currently the more affordable of the two stocks.

Summary

Rithm Capital beats DiamondRock Hospitality on 11 of the 16 factors compared between the two stocks.

About DiamondRock Hospitality

(Get Rating)

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 31 premium quality hotels with over 10,000 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families as well as unique boutique hotels in the lifestyle segment.

About Rithm Capital

(Get Rating)

Rithm Capital Corp. provides capital and services to the real estate and financial services sectors in the United States. Its investment portfolio comprises mortgage servicing related assets, residential securities and loans, and consumer loans. It qualifies as a real estate investment trust for federal income tax purposes. The company generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is headquartered in New York, New York.

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