Comparing Starwood Property Trust (NYSE:STWD) and VICI Properties (NYSE:VICI)

Starwood Property Trust (NYSE:STWD) and VICI Properties (NYSE:VICI) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Profitability

This table compares Starwood Property Trust and VICI Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starwood Property Trust	30.00%	8.85%	0.78%
VICI Properties	65.04%	9.31%	5.40%

Analyst Recommendations

This is a summary of current recommendations and price targets for Starwood Property Trust and VICI Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starwood Property Trust	0	1	3	0	2.75
VICI Properties	0	2	7	0	2.78

Starwood Property Trust presently has a consensus price target of $21.70, suggesting a potential upside of 3.28%. VICI Properties has a consensus price target of $36.20, suggesting a potential upside of 15.32%. Given VICI Properties’ stronger consensus rating and higher possible upside, analysts plainly believe VICI Properties is more favorable than Starwood Property Trust.

Earnings and Valuation

This table compares Starwood Property Trust and VICI Properties’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starwood Property Trust	$1.46 billion	4.49	$871.47 million	$1.75	12.01
VICI Properties	$2.60 billion	12.23	$1.12 billion	$2.18	14.40

VICI Properties has higher revenue and earnings than Starwood Property Trust. Starwood Property Trust is trading at a lower price-to-earnings ratio than VICI Properties, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

49.6% of Starwood Property Trust shares are held by institutional investors. Comparatively, 96.8% of VICI Properties shares are held by institutional investors. 5.4% of Starwood Property Trust shares are held by insiders. Comparatively, 0.2% of VICI Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Starwood Property Trust has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, VICI Properties has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Dividends

Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 9.1%. VICI Properties pays an annual dividend of $1.56 per share and has a dividend yield of 5.0%. Starwood Property Trust pays out 109.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. VICI Properties pays out 71.6% of its earnings in the form of a dividend. VICI Properties has increased its dividend for 5 consecutive years.

Summary

VICI Properties beats Starwood Property Trust on 14 of the 17 factors compared between the two stocks.

About Starwood Property Trust

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through four segments: Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was incorporated in 2009 and is headquartered in Greenwich, Connecticut.

About VICI Properties

VICI Properties Inc. is an S&P 500 experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality and entertainment destinations, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas, three of the most iconic entertainment facilities on the Las Vegas Strip. VICI Properties' geographically diverse portfolio consists of 50 gaming facilities across the United States and Canada comprising approximately 124 million square feet and features approximately 60,300 hotel rooms and more than 450 restaurants, bars, nightclubs and sportsbooks. Its properties are occupied by industry leading gaming and hospitality operators under long-term, triple-net lease agreements. VICI Properties has a growing array of investing and financing partnerships with leading non-gaming experiential operators, including Great Wolf Resorts, Cabot, Canyon Ranch and Chelsea Piers. VICI Properties also owns four championship golf courses and 34 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip. VICI Properties' goal is to create the highest quality and most productive experiential real estate portfolio through a strategy of partnering with the highest quality experiential place makers and operators.