CubeSmart (NYSE:CUBE) and Xenia Hotels & Resorts (NYSE:XHR) Critical Contrast

CubeSmart (NYSE:CUBE) and Xenia Hotels & Resorts (NYSE:XHR) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Insider and Institutional Ownership

97.6% of CubeSmart shares are held by institutional investors. Comparatively, 92.4% of Xenia Hotels & Resorts shares are held by institutional investors. 1.7% of CubeSmart shares are held by company insiders. Comparatively, 3.2% of Xenia Hotels & Resorts shares are held by company 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.

Earnings & Valuation

This table compares CubeSmart and Xenia Hotels & Resorts”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CubeSmart	$1.12 billion	7.89	$333.78 million	$1.45	26.80
Xenia Hotels & Resorts	$1.08 billion	1.36	$63.09 million	$0.64	24.77

CubeSmart has higher revenue and earnings than Xenia Hotels & Resorts. Xenia Hotels & Resorts is trading at a lower price-to-earnings ratio than CubeSmart, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares CubeSmart and Xenia Hotels & Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CubeSmart	29.72%	11.84%	4.97%
Xenia Hotels & Resorts	5.85%	5.13%	2.21%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for CubeSmart and Xenia Hotels & Resorts, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CubeSmart	0	10	6	0	2.38
Xenia Hotels & Resorts	1	0	3	0	2.50

CubeSmart presently has a consensus price target of $43.64, suggesting a potential upside of 12.29%. Xenia Hotels & Resorts has a consensus price target of $14.50, suggesting a potential downside of 8.52%. Given CubeSmart’s higher possible upside, equities research analysts clearly believe CubeSmart is more favorable than Xenia Hotels & Resorts.

Dividends

CubeSmart pays an annual dividend of $2.12 per share and has a dividend yield of 5.5%. Xenia Hotels & Resorts pays an annual dividend of $0.56 per share and has a dividend yield of 3.5%. CubeSmart pays out 146.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Xenia Hotels & Resorts pays out 87.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart has increased its dividend for 16 consecutive years and Xenia Hotels & Resorts has increased its dividend for 3 consecutive years. CubeSmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

CubeSmart has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Xenia Hotels & Resorts has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Summary

CubeSmart beats Xenia Hotels & Resorts on 13 of the 17 factors compared between the two stocks.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

About Xenia Hotels & Resorts

Xenia Hotels & Resorts, Inc. is a real estate investment trust, which engages in the provision of investment in luxury and upper upscale hotels and resorts. It also owns a diversified portfolio of lodging properties operated by Marriott, Kimpton, Hyatt, Aston, Fairmong, and Loews. The company was founded in 2007 and is headquartered in Orlando, FL.