Summit Hotel Properties (NYSE:INN) vs. W.P. Carey (NYSE:WPC) Critical Analysis

Summit Hotel Properties (NYSE:INN) and W.P. Carey (NYSE:WPC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, earnings, profitability, valuation, risk, institutional ownership and dividends.

Volatility & Risk

Summit Hotel Properties has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, W.P. Carey has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Dividends

Summit Hotel Properties pays an annual dividend of $0.32 per share and has a dividend yield of 5.9%. W.P. Carey pays an annual dividend of $3.60 per share and has a dividend yield of 5.4%. Summit Hotel Properties pays out -355.6% of its earnings in the form of a dividend. W.P. Carey pays out 236.8% 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 2 consecutive years and W.P. Carey has raised its dividend for 2 consecutive years. Summit Hotel Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

96.5% of Summit Hotel Properties shares are held by institutional investors. Comparatively, 73.7% of W.P. Carey shares are held by institutional investors. 3.8% of Summit Hotel Properties shares are held by company insiders. Comparatively, 0.9% of W.P. Carey shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Summit Hotel Properties and W.P. Carey, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Hotel Properties	0	1	0	0	2.00
W.P. Carey	1	7	2	0	2.10

Summit Hotel Properties presently has a consensus price target of $5.75, indicating a potential upside of 6.38%. W.P. Carey has a consensus price target of $65.6667, indicating a potential downside of 0.68%. Given Summit Hotel Properties’ higher probable upside, equities analysts clearly believe Summit Hotel Properties is more favorable than W.P. Carey.

Valuation & Earnings

This table compares Summit Hotel Properties and W.P. Carey”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Hotel Properties	$731.78 million	0.80	$41.02 million	($0.09)	-60.06
W.P. Carey	$1.58 billion	9.15	$460.84 million	$1.52	43.50

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

Profitability

This table compares Summit Hotel Properties and W.P. Carey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit Hotel Properties	1.00%	0.56%	0.25%
W.P. Carey	20.42%	4.00%	1.91%

Summary

W.P. Carey beats Summit Hotel Properties on 10 of the 16 factors compared between the two stocks.

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging properties with efficient operating models primarily in the upscale segment of the lodging industry. As of November 1, 2023, the Company’s portfolio consisted of 101 assets, 57 of which are wholly owned, with a total of 15,035 guestrooms located in 24 states.

About W.P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.