Sotherly Hotels (NASDAQ:SOHO) and American Hotel Income Properties REIT (OTCMKTS:AHOTF) Critical Analysis

American Hotel Income Properties REIT (OTCMKTS:AHOTF) and Sotherly Hotels (NASDAQ:SOHO) are both real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Institutional & Insider Ownership

10.3% of American Hotel Income Properties REIT shares are owned by institutional investors. Comparatively, 27.5% of Sotherly Hotels shares are owned by institutional investors. 14.6% of Sotherly Hotels shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares American Hotel Income Properties REIT and Sotherly Hotels’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Hotel Income Properties REIT	N/A	N/A	N/A
Sotherly Hotels	2.27%	7.81%	0.98%

Analyst Ratings

This is a summary of recent ratings and price targets for American Hotel Income Properties REIT and Sotherly Hotels, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Hotel Income Properties REIT	0	0	0	0	N/A
Sotherly Hotels	0	1	0	0	2.00

American Hotel Income Properties REIT currently has a consensus target price of $3.75, suggesting a potential upside of 662.20%. Sotherly Hotels has a consensus target price of $2.25, suggesting a potential upside of 67.91%. Given American Hotel Income Properties REIT’s higher possible upside, equities analysts clearly believe American Hotel Income Properties REIT is more favorable than Sotherly Hotels.

Valuation & Earnings

This table compares American Hotel Income Properties REIT and Sotherly Hotels’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Hotel Income Properties REIT	N/A	N/A	N/A	$0.06	8.10
Sotherly Hotels	$173.84 million	0.15	$3.94 million	($0.21)	-6.38

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

Summary

Sotherly Hotels beats American Hotel Income Properties REIT on 6 of the 9 factors compared between the two stocks.

About American Hotel Income Properties REIT

American Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), or AHIP, is a limited partnership formed to invest in hotel real estate properties across the United States. AHIP's portfolio of premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. AHIP's long-term objectives are to build on its proven track record of successful investment, deliver monthly U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio.

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.