Financial Review: Chatham Lodging Trust (NYSE:CLDT) & Highwoods Properties (NYSE:HIW)

Highwoods Properties (NYSE:HIW) and Chatham Lodging Trust (NYSE:CLDT) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.

Insider and Institutional Ownership

96.3% of Highwoods Properties shares are held by institutional investors. Comparatively, 88.4% of Chatham Lodging Trust shares are held by institutional investors. 1.9% of Highwoods Properties shares are held by insiders. Comparatively, 7.1% of Chatham Lodging Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 7.8%. Chatham Lodging Trust pays an annual dividend of $0.36 per share and has a dividend yield of 5.1%. Highwoods Properties pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust pays out 3,600.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chatham Lodging Trust has raised its dividend for 2 consecutive years. Highwoods Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Highwoods Properties and Chatham Lodging Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highwoods Properties	15.98%	5.48%	2.13%
Chatham Lodging Trust	2.89%	1.11%	0.72%

Volatility & Risk

Highwoods Properties has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Chatham Lodging Trust has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Highwoods Properties and Chatham Lodging Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highwoods Properties	1	4	2	0	2.14
Chatham Lodging Trust	1	0	2	0	2.33

Highwoods Properties currently has a consensus price target of $31.00, suggesting a potential upside of 20.83%. Chatham Lodging Trust has a consensus price target of $9.50, suggesting a potential upside of 33.52%. Given Chatham Lodging Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Chatham Lodging Trust is more favorable than Highwoods Properties.

Earnings and Valuation

This table compares Highwoods Properties and Chatham Lodging Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highwoods Properties	$825.86 million	3.41	$102.25 million	$1.17	21.93
Chatham Lodging Trust	$317.21 million	1.09	$4.17 million	$0.01	711.50

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

Summary

Highwoods Properties beats Chatham Lodging Trust on 10 of the 16 factors compared between the two stocks.

About Highwoods Properties

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (REIT) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Highwoods is in the work-placemaking business. We believe that by creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stakeholders.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia.