Contrasting Washington Real Estate Investment Trust (NYSE:WRE) & Pebblebrook Hotel Trust (NYSE:PEB)

Washington Real Estate Investment Trust (NYSE:WRE) and Pebblebrook Hotel Trust (NYSE:PEB) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Volatility and Risk

Washington Real Estate Investment Trust has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Pebblebrook Hotel Trust has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Insider and Institutional Ownership

90.3% of Washington Real Estate Investment Trust shares are held by institutional investors. 0.8% of Washington Real Estate Investment Trust shares are held by insiders. Comparatively, 1.3% of Pebblebrook Hotel Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Washington Real Estate Investment Trust pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. Pebblebrook Hotel Trust pays an annual dividend of $1.52 per share and has a dividend yield of 5.8%. Washington Real Estate Investment Trust pays out 64.5% of its earnings in the form of a dividend. Pebblebrook Hotel Trust pays out 62.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Pebblebrook Hotel Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations for Washington Real Estate Investment Trust and Pebblebrook Hotel Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Real Estate Investment Trust 1 1 1 0 2.00
Pebblebrook Hotel Trust 2 6 3 0 2.09

Washington Real Estate Investment Trust presently has a consensus target price of $27.00, indicating a potential downside of 13.10%. Pebblebrook Hotel Trust has a consensus target price of $31.18, indicating a potential upside of 19.01%. Given Pebblebrook Hotel Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Pebblebrook Hotel Trust is more favorable than Washington Real Estate Investment Trust.

Profitability

This table compares Washington Real Estate Investment Trust and Pebblebrook Hotel Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Real Estate Investment Trust 103.68% -0.55% -0.24%
Pebblebrook Hotel Trust -0.21% 0.16% 0.09%

Earnings and Valuation

This table compares Washington Real Estate Investment Trust and Pebblebrook Hotel Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Washington Real Estate Investment Trust $336.89 million 7.43 $25.63 million $1.86 16.70
Pebblebrook Hotel Trust $828.68 million 4.13 $13.39 million $2.45 10.69

Washington Real Estate Investment Trust has higher earnings, but lower revenue than Pebblebrook Hotel Trust. Pebblebrook Hotel Trust is trading at a lower price-to-earnings ratio than Washington Real Estate Investment Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Pebblebrook Hotel Trust beats Washington Real Estate Investment Trust on 11 of the 16 factors compared between the two stocks.

About Washington Real Estate Investment Trust

Washington REIT owns and operates uniquely positioned real estate assets in the Washington D.C. market. Backed by decades of experience, expertise and ambition, we create value by transforming insights into strategy and strategy into action. Our portfolio of 48 properties includes approximately 6.1 million square feet of commercial space and 4,268 multifamily apartment units. These 48 properties consist of 19 office properties, 16 retail centers and 13 multifamily properties. Washington REIT shares are publicly traded on the New York Stock Exchange (NYSE:WRE).

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust is a publicly traded real estate investment trust (“REIT”) organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities. The Company owns 61 hotels, totaling approximately 14,600 guest rooms, located in 10 states and the District of Columbia, including: Del Mar, California; Los Angeles, California (Beverly Hills, Santa Monica and West Hollywood); San Diego, California; San Francisco, California; Santa Cruz, California; Washington, DC; Coral Gables, Florida; Key West, Florida; Naples, Florida; Buckhead, Georgia; Chicago, Illinois; Boston, Massachusetts; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee; Columbia River Gorge, Washington; and Seattle, Washington.

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