Analyzing Chatham Lodging Trust (NYSE:CLDT) & RLJ Lodging Trust (NYSE:RLJ)

RLJ Lodging Trust (NYSE:RLJ) and Chatham Lodging Trust (NYSE:CLDT) are both small-cap real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for RLJ Lodging Trust and Chatham Lodging Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLJ Lodging Trust	3	5	2	0	1.90
Chatham Lodging Trust	0	2	2	1	2.80

RLJ Lodging Trust presently has a consensus price target of $10.94, indicating a potential downside of 0.51%. Chatham Lodging Trust has a consensus price target of $13.00, indicating a potential upside of 4.59%. Given Chatham Lodging Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Chatham Lodging Trust is more favorable than RLJ Lodging Trust.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLJ Lodging Trust	$1.38 billion	1.21	$28.51 million	N/A	N/A
Chatham Lodging Trust	$295.08 million	1.97	$15.05 million	$0.08	155.38

RLJ Lodging Trust has higher revenue and earnings than Chatham Lodging Trust.

Dividends

RLJ Lodging Trust pays an annual dividend of $0.60 per share and has a dividend yield of 5.5%. Chatham Lodging Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.2%. Chatham Lodging Trust pays out 500.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust has raised its dividend for 3 consecutive years and Chatham Lodging Trust has raised its dividend for 2 consecutive years. RLJ Lodging Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

92.3% of RLJ Lodging Trust shares are held by institutional investors. Comparatively, 88.4% of Chatham Lodging Trust shares are held by institutional investors. 3.7% of RLJ Lodging Trust shares are held by company insiders. Comparatively, 8.1% of Chatham Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

RLJ Lodging Trust has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Chatham Lodging Trust has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RLJ Lodging Trust	2.00%	1.52%	0.58%
Chatham Lodging Trust	4.00%	1.56%	1.00%

Summary

Chatham Lodging Trust beats RLJ Lodging Trust on 9 of the 16 factors compared between the two stocks.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

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.