Analyzing Summit Hotel Properties (NYSE:INN) & NNN REIT (NYSE:NNN)

Summit Hotel Properties (NYSE:INN – Get Rating) and NNN REIT (NYSE:NNN – Get Rating) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Valuation and Earnings

This table compares Summit Hotel Properties and NNN REIT’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Hotel Properties	$675.70 million	1.08	-$1.05 million	($0.09)	-75.33
NNN REIT	$773.05 million	10.10	$334.63 million	$1.92	22.32

NNN REIT has higher revenue and earnings than Summit Hotel Properties. Summit Hotel Properties is trading at a lower price-to-earnings ratio than NNN REIT, indicating that it is currently the more affordable of the two stocks.

Dividends

Summit Hotel Properties pays an annual dividend of $0.24 per share and has a dividend yield of 3.5%. NNN REIT pays an annual dividend of $2.20 per share and has a dividend yield of 5.1%. Summit Hotel Properties pays out -266.7% of its earnings in the form of a dividend. NNN REIT pays out 114.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Hotel Properties has raised its dividend for 1 consecutive years and NNN REIT has raised its dividend for 33 consecutive years. NNN REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Summit Hotel Properties has a beta of 2.01, meaning that its stock price is 101% more volatile than the S&P 500. Comparatively, NNN REIT has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

96.6% of Summit Hotel Properties shares are owned by institutional investors. Comparatively, 87.6% of NNN REIT shares are owned by institutional investors. 3.0% of Summit Hotel Properties shares are owned by insiders. Comparatively, 0.8% of NNN REIT shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Summit Hotel Properties and NNN REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit Hotel Properties	0.94%	0.48%	0.22%
NNN REIT	43.64%	8.49%	4.27%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Summit Hotel Properties and NNN REIT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Hotel Properties	0	2	2	0	2.50
NNN REIT	0	2	5	0	2.71

Summit Hotel Properties presently has a consensus target price of $9.83, indicating a potential upside of 45.03%. NNN REIT has a consensus target price of $49.00, indicating a potential upside of 14.33%. Given Summit Hotel Properties’ higher possible upside, analysts plainly believe Summit Hotel Properties is more favorable than NNN REIT.

Summary

NNN REIT beats Summit Hotel Properties on 12 of the 17 factors compared between the two stocks.

About Summit Hotel Properties

(Get Rating)

Summit Hotel Properties, Inc. is a real estate investment trust, which operates as a self-managed hotel investment company. It focuses on owning premium-branded select-service hotels. Its hotels are located in corporate offices, retail centers, airports, state capitols, convention centers, universities, and leisure attractions. The company was founded on June 30, 2010 and is headquartered in Austin, TX.

About NNN REIT

(Get Rating)

NNN REIT, Inc. is a real estate investment trust, which engages in investing in properties subject to long-term net leases. It acquires, owns, invests in, and develops properties that are leased to retail tenants under long-term net leases and held for investment. The company was founded on August 8, 1984, and is headquartered in Orlando, FL.