Contrasting DiamondRock Hospitality (NYSE:DRH) & Four Corners Property Trust (NYSE:FCPT)

DiamondRock Hospitality (NYSE:DRH) and Four Corners Property Trust (NYSE:FCPT) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Profitability

This table compares DiamondRock Hospitality and Four Corners Property Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DiamondRock Hospitality	6.30%	4.25%	2.18%
Four Corners Property Trust	37.27%	7.68%	3.96%

Volatility and Risk

DiamondRock Hospitality has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500. Comparatively, Four Corners Property Trust has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Institutional & Insider Ownership

98.7% of Four Corners Property Trust shares are held by institutional investors. 1.4% of DiamondRock Hospitality shares are held by company insiders. Comparatively, 1.2% of Four Corners Property Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for DiamondRock Hospitality and Four Corners Property Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DiamondRock Hospitality	0	2	3	0	2.60
Four Corners Property Trust	0	2	3	0	2.60

DiamondRock Hospitality presently has a consensus target price of $10.17, suggesting a potential upside of 14.75%. Four Corners Property Trust has a consensus target price of $30.50, suggesting a potential upside of 8.08%. Given DiamondRock Hospitality’s higher probable upside, equities research analysts plainly believe DiamondRock Hospitality is more favorable than Four Corners Property Trust.

Valuation and Earnings

This table compares DiamondRock Hospitality and Four Corners Property Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DiamondRock Hospitality	$1.11 billion	1.65	$86.34 million	$0.28	31.64
Four Corners Property Trust	$250.61 million	10.89	$95.34 million	$1.07	26.37

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

Dividends

DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.4%. Four Corners Property Trust pays an annual dividend of $1.38 per share and has a dividend yield of 4.9%. DiamondRock Hospitality pays out 42.9% of its earnings in the form of a dividend. Four Corners Property Trust pays out 129.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Four Corners Property Trust beats DiamondRock Hospitality on 8 of the 14 factors compared between the two stocks.

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.

About Four Corners Property Trust

FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the ownership, acquisition and leasing of restaurant and retail properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease, on a net basis, for use in the restaurant and retail industries.