Gaming and Leisure Properties (NASDAQ:GLPI) versus Diamondrock Hospitality (DRH) Head to Head Review

Gaming and Leisure Properties (NASDAQ: GLPI) and Diamondrock Hospitality (NYSE:DRH) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Gaming and Leisure Properties and Diamondrock Hospitality, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gaming and Leisure Properties 1 3 4 0 2.38
Diamondrock Hospitality 2 2 6 0 2.40

Gaming and Leisure Properties currently has a consensus target price of $37.86, suggesting a potential upside of 12.27%. Diamondrock Hospitality has a consensus target price of $11.75, suggesting a potential upside of 11.48%. Given Gaming and Leisure Properties’ higher possible upside, research analysts plainly believe Gaming and Leisure Properties is more favorable than Diamondrock Hospitality.

Volatility & Risk

Gaming and Leisure Properties has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Diamondrock Hospitality has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.

Profitability

This table compares Gaming and Leisure Properties and Diamondrock Hospitality’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gaming and Leisure Properties 39.18% 17.31% 5.84%
Diamondrock Hospitality 10.56% 5.02% 2.97%

Institutional & Insider Ownership

92.7% of Gaming and Leisure Properties shares are owned by institutional investors. 5.9% of Gaming and Leisure Properties shares are owned by insiders. Comparatively, 1.1% of Diamondrock Hospitality shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Gaming and Leisure Properties pays an annual dividend of $2.52 per share and has a dividend yield of 7.5%. Diamondrock Hospitality pays an annual dividend of $0.50 per share and has a dividend yield of 4.7%. Gaming and Leisure Properties pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diamondrock Hospitality pays out 50.0% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Gaming and Leisure Properties and Diamondrock Hospitality’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gaming and Leisure Properties $971.31 million 7.40 $380.59 million $3.15 10.70
Diamondrock Hospitality $870.01 million 2.43 $91.87 million $1.00 10.54

Gaming and Leisure Properties has higher revenue and earnings than Diamondrock Hospitality. Diamondrock Hospitality is trading at a lower price-to-earnings ratio than Gaming and Leisure Properties, indicating that it is currently the more affordable of the two stocks.

Summary

Gaming and Leisure Properties beats Diamondrock Hospitality on 12 of the 16 factors compared between the two stocks.

Gaming and Leisure Properties Company Profile

GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. GLPI also intends to diversify its portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. GLPI elected to be taxed as a REIT for United States federal income tax purposes commencing with the 2014 taxable year and is the first gaming-focused REIT in North America.

Diamondrock Hospitality Company Profile

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 top gateway markets and destination resort locations. As of February 26, 2018, the Company owns 28 premium quality hotels with over 9,600 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families such as Hilton and Marriott as well as unique boutique hotels in the lifestyle segment. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com.

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