Head to Head Survey: Seritage Growth Properties (NYSE:SRG) & DiamondRock Hospitality (NYSE:DRH)

Seritage Growth Properties (NYSE:SRG) and DiamondRock Hospitality (NYSE:DRH) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Profitability

This table compares Seritage Growth Properties and DiamondRock Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seritage Growth Properties	-487.58%	-23.03%	-16.16%
DiamondRock Hospitality	5.69%	4.04%	2.05%

Insider and Institutional Ownership

78.9% of Seritage Growth Properties shares are held by institutional investors. 0.2% of Seritage Growth Properties shares are held by company insiders. Comparatively, 0.9% of DiamondRock Hospitality shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Seritage Growth Properties and DiamondRock Hospitality, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seritage Growth Properties	1	0	0	0	1.00
DiamondRock Hospitality	0	7	3	0	2.30

DiamondRock Hospitality has a consensus target price of $11.65, indicating a potential downside of 1.94%. Given DiamondRock Hospitality’s stronger consensus rating and higher possible upside, analysts clearly believe DiamondRock Hospitality is more favorable than Seritage Growth Properties.

Valuation & Earnings

This table compares Seritage Growth Properties and DiamondRock Hospitality”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seritage Growth Properties	$18.20 million	8.09	-$68.21 million	($1.44)	-1.82
DiamondRock Hospitality	$1.12 billion	2.16	$48.05 million	$0.47	25.28

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

Volatility and Risk

Seritage Growth Properties has a beta of 2.19, suggesting that its share price is 119% more volatile than the S&P 500. Comparatively, DiamondRock Hospitality has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Summary

DiamondRock Hospitality beats Seritage Growth Properties on 11 of the 14 factors compared between the two stocks.

About Seritage Growth Properties

Seritage Growth Properties operates as a real estate investment trust. The firm engages in the acquisition, ownership, development, redevelopment, management, and leasing of retail properties throughout the United States. Its property portfolio includes mall, shopping centers and freestanding locations. The company was founded on June 3, 2015 and is headquartered in New York, NY.

About DiamondRock Hospitality

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 leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.