How Does Ashford Hospitality Trust Stack Up Against the Competition?

Ashford Hospitality Trust, Inc. (NYSE:$AHT) is a publicly traded, externally advised hospitality REIT – or real estate investment trust – company that operates across the US. However, it is not the only group in this industry. So how does it stack it stack up against the competition? Let’s weigh the facts.

What is Ashford Hospitality Trust?

Ashford Hospitality Trust is an externally advised REIT that specializes in full service upscale and upper-upscale hotels in the US. Ashford Hospitality Limited Partnership, its operating partner, conducts business for the trust. They currently have 29.7% ownership in Ashford Inc., a 13.3% ownership in OpenKey, a 96.6% ownership in Ashford Quantitative Alternates (U.S.), LP, 86 hotel condominium units at WorldQuest Resort in Orlando, as well as 121 other properties with over 25000 rooms.

Earnings and Valuations

Ashford had a Gross Revenue of $1.45 billion, with an EBITDA $394.52 million, resulting in a Price/Earnings Ratio of -4.83. The average of its competitors, however, is $1.10 billion Gross Revenue, $338.63 million, and a Price/Earnings Ratio of -15.27.

This indicates that on average, Ashford’s revenue and earnings are higher than its rivals. However, the company is also currently more expensive than its competition as indicated by its higher price-to-earnings ratio.

Profitability

Ashford currently has a Return on Equity of -10.41% and a Return on Assets of -1.64%, resulting in Net Margins of -5.43%. It’s competition, on the other hand, has an average of 2.84% on Return of Equity and 2.42% on Return of Assets, with a net margin of 8.85%.

Dividends

Ashford has a dividend yield of 7.4% and an annual dividend of $0.48. This compares favorably to the average among its competitors of a 5.5% dividend yield and a payout of 135.4% earnings dividend payout. This indicates that Ashford is clearly the better dividend stock.

What are Analysts Saying?

Ashford currently boasts 3 ‘Hold’ ratings and 3 ‘Buy’ ratings, giving it a rating score of 2.50, or an aggregate ‘Buy’. As for its competitors, they have 953 ‘Hold’ ratings, 903 ‘Buy’ ratings, and 234 ‘Sell’ ratings, giving them an aggregate average of 2.34 or a ‘Buy’ rating. Despite both receiving average ‘Buy’ ratings, we can see that Ashford’s rating is slightly higher.

Ashford also has an aggregate price target of $7.46, which hints at a potential 15.28% upside. The REIT competitors have an average upside of 5.84%. Both of these stats indicate that analysts favor Ashford above its rivals.

Insiders and Institutions

Insider ownership accounts for 18.2% of Ashford’s total shares, whereas their competition sits well below that, at 5.4%. This means that insiders in Ashford have more faith, on average than the competitor’s insiders.

Comparatively, 70.3% of Ashford’s stock is currently owned by investors. The other REIT’s we looked at had an average of 77.4% ownership by institutions. Institutional ownership can indicate hedge funds and other institutions have a strong faith in the stock. This gives a slight edge to the competition.

What are the Risks?

The beta is a scale used to indicate market volatility of a stock compared to a market average. It begins at 1 and oscillates in either direction to indicate a stock that is either more or less stable than the average, with higher numbers indicating more risk.

Ashford currently has a beta of 1.47. This would indicate that the stock is 47% more volatile than the S&P 500 average. It’s competitors, on the other hand, have an average beta of 1.00. This makes Ashford more volatile than its rivals.