Head-To-Head Analysis: Service Properties Trust (NASDAQ:SVC) vs. Sotherly Hotels (NASDAQ:SOHON)

Sotherly Hotels (NASDAQ:SOHON) and Service Properties Trust (NASDAQ:SVC) are both real estate companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Sotherly Hotels and Service Properties Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	0	0	0	N/A
Service Properties Trust	1	1	0	0	1.50

Service Properties Trust has a consensus price target of $9.67, indicating a potential upside of 17.46%. Given Service Properties Trust’s higher possible upside, analysts clearly believe Service Properties Trust is more favorable than Sotherly Hotels.

Dividends

Sotherly Hotels pays an annual dividend of $2.06 per share and has a dividend yield of 9.1%. Service Properties Trust pays an annual dividend of $0.80 per share and has a dividend yield of 9.7%. Service Properties Trust pays out -1,599.7% of its earnings in the form of a dividend. Service Properties Trust has raised its dividend for 1 consecutive years. Service Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Sotherly Hotels and Service Properties Trust’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$173.06 million	N/A	N/A	N/A	N/A
Service Properties Trust	$1.86 billion	0.73	-$132.38 million	($0.05)	-164.57

Sotherly Hotels has higher earnings, but lower revenue than Service Properties Trust.

Institutional and Insider Ownership

78.2% of Service Properties Trust shares are owned by institutional investors. 1.4% of Service Properties Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Sotherly Hotels and Service Properties 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
Service Properties Trust	-0.49%	-0.66%	-0.12%

Summary

Service Properties Trust beats Sotherly Hotels on 7 of the 10 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 Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust, or REIT, with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of June 30, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of June 30, 2023, SVC also owned 763 retail service-focused net lease properties totaling approximately 13.5 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with approximately $36 billion in assets under management as of June 30, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.