Critical Comparison: Ashford Hospitality Trust (NYSE:AHT) & Paramount Group (NYSE:PGRE)

Paramount Group (NYSE:PGRE) and Ashford Hospitality Trust (NYSE:AHT) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for Paramount Group and Ashford Hospitality Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paramount Group 1 1 2 0 2.25
Ashford Hospitality Trust 0 2 1 0 2.33

Paramount Group presently has a consensus price target of $15.00, suggesting a potential upside of 1.97%. Ashford Hospitality Trust has a consensus price target of $4.67, suggesting a potential upside of 80.88%. Given Ashford Hospitality Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Ashford Hospitality Trust is more favorable than Paramount Group.

Dividends

Paramount Group pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. Ashford Hospitality Trust pays an annual dividend of $0.24 per share and has a dividend yield of 9.3%. Paramount Group pays out 41.7% of its earnings in the form of a dividend. Ashford Hospitality Trust pays out 19.0% 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. Paramount Group has raised its dividend for 1 consecutive years. Ashford Hospitality Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Paramount Group has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Ashford Hospitality Trust has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Earnings and Valuation

This table compares Paramount Group and Ashford Hospitality Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Paramount Group $758.96 million 4.41 $9.14 million $0.96 15.32
Ashford Hospitality Trust $1.43 billion 0.18 -$126.97 million $1.26 2.05

Paramount Group has higher earnings, but lower revenue than Ashford Hospitality Trust. Ashford Hospitality Trust is trading at a lower price-to-earnings ratio than Paramount Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Paramount Group and Ashford Hospitality Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paramount Group 2.77% 0.44% 0.24%
Ashford Hospitality Trust -9.40% -32.26% -2.52%

Institutional & Insider Ownership

63.2% of Paramount Group shares are held by institutional investors. Comparatively, 59.9% of Ashford Hospitality Trust shares are held by institutional investors. 8.0% of Paramount Group shares are held by insiders. Comparatively, 11.6% of Ashford Hospitality Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Paramount Group beats Ashford Hospitality Trust on 9 of the 17 factors compared between the two stocks.

Paramount Group Company Profile

Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

Ashford Hospitality Trust Company Profile

Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing opportunistically in the hospitality industry in upper upscale, full-service hotels.

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