Contrasting City Office REIT (NYSE:CIO) & Chatham Lodging Trust (NYSE:CLDT)

Chatham Lodging Trust (NYSE:CLDT) and City Office REIT (NYSE:CIO) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Insider & Institutional Ownership

88.4% of Chatham Lodging Trust shares are held by institutional investors. Comparatively, 67.5% of City Office REIT shares are held by institutional investors. 6.5% of Chatham Lodging Trust shares are held by insiders. Comparatively, 3.9% of City Office REIT 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chatham Lodging Trust	-0.99%	-0.39%	-0.24%
City Office REIT	-5.56%	-1.48%	-0.65%

Volatility & Risk

Chatham Lodging Trust has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, City Office REIT has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500.

Dividends

Chatham Lodging Trust pays an annual dividend of $0.28 per share and has a dividend yield of 3.2%. City Office REIT pays an annual dividend of $0.40 per share and has a dividend yield of 8.1%. Chatham Lodging Trust pays out -121.7% of its earnings in the form of a dividend. City Office REIT pays out -95.2% 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.

Valuation & Earnings

This table compares Chatham Lodging Trust and City Office REIT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chatham Lodging Trust	$311.11 million	1.38	$2.64 million	($0.23)	-38.17
City Office REIT	$179.10 million	1.10	-$2.68 million	($0.42)	-11.73

Chatham Lodging Trust has higher revenue and earnings than City Office REIT. Chatham Lodging Trust is trading at a lower price-to-earnings ratio than City Office REIT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Chatham Lodging Trust and City Office REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chatham Lodging Trust	0	0	1	0	3.00
City Office REIT	0	0	0	0	0.00

Chatham Lodging Trust presently has a consensus price target of $12.00, indicating a potential upside of 36.67%. Given Chatham Lodging Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Chatham Lodging Trust is more favorable than City Office REIT.

Summary

Chatham Lodging Trust beats City Office REIT on 13 of the 16 factors compared between the two stocks.

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.

About City Office REIT

City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located predominantly in Sun Belt markets. City Office currently owns or has a controlling interest in 5.7 million square feet of office properties. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.