CDL Hospitality Trusts (OTCMKTS:CDHSF) vs. DiamondRock Hospitality (NYSE:DRH) Critical Analysis

CDL Hospitality Trusts (OTCMKTS:CDHSF) and DiamondRock Hospitality (NYSE:DRH) are both real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CDL Hospitality Trusts and DiamondRock Hospitality, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CDL Hospitality Trusts	0	1	0	0	2.00
DiamondRock Hospitality	0	3	1	0	2.25

DiamondRock Hospitality has a consensus target price of $9.83, suggesting a potential upside of 20.07%. Given DiamondRock Hospitality’s stronger consensus rating and higher probable upside, analysts clearly believe DiamondRock Hospitality is more favorable than CDL Hospitality Trusts.

Dividends

CDL Hospitality Trusts pays an annual dividend of $0.11 per share and has a dividend yield of 13.3%. DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.5%. CDL Hospitality Trusts pays out 86.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DiamondRock Hospitality pays out 30.8% of its earnings in the form of a dividend.

Institutional and Insider Ownership

16.5% of CDL Hospitality Trusts shares are owned by institutional investors. 1.4% of DiamondRock Hospitality shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CDL Hospitality Trusts	N/A	N/A	N/A
DiamondRock Hospitality	8.79%	5.79%	2.91%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CDL Hospitality Trusts	N/A	N/A	N/A	$0.13	6.51
DiamondRock Hospitality	$1.00 billion	1.71	$109.33 million	$0.39	21.00

DiamondRock Hospitality has higher revenue and earnings than CDL Hospitality Trusts. CDL Hospitality Trusts 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

DiamondRock Hospitality beats CDL Hospitality Trusts on 11 of the 13 factors compared between the two stocks.

About CDL Hospitality Trusts

CDL Hospitality Trusts (CDLHT) is one of Asia's leading hospitality trusts with assets under management of about S$3.1 billion as at 30 June 2023. CDLHT is a stapled group comprising CDL Hospitality Real Estate Investment Trust (H-REIT), a real estate investment trust, and CDL Hospitality Business Trust (HBT), a business trust. CDLHT was listed on the Singapore Exchange Securities Trading Limited on 19 July 2006. M&C REIT Management Limited is the manager of H-REIT, the first hotel real estate investment trust in Singapore, and M&C Business Trust Management Limited is the trustee-manager of HBT.

About DiamondRock Hospitality

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 leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.