Financial Review: Sotherly Hotels (NASDAQ:SOHO) versus Digital Realty Trust (NYSE:DLR)

Sotherly Hotels (NASDAQ:SOHO) and Digital Realty Trust (NYSE:DLR) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

27.5% of Sotherly Hotels shares are owned by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are owned by institutional investors. 15.9% of Sotherly Hotels shares are owned by insiders. Comparatively, 0.2% of Digital Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Sotherly Hotels and Digital Realty Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$173.84 million	0.10	$3.94 million	($0.33)	-2.55
Digital Realty Trust	$5.48 billion	10.06	$948.84 million	$1.19	139.61

Digital Realty Trust has higher revenue and earnings than Sotherly Hotels. Sotherly Hotels is trading at a lower price-to-earnings ratio than Digital Realty Trust, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Sotherly Hotels has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Sotherly Hotels and Digital Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	1	0	0	2.00
Digital Realty Trust	1	6	14	2	2.74

Sotherly Hotels presently has a consensus price target of $1.50, indicating a potential upside of 78.00%. Digital Realty Trust has a consensus price target of $179.70, indicating a potential upside of 8.16%. Given Sotherly Hotels’ higher possible upside, equities research analysts clearly believe Sotherly Hotels is more favorable than Digital Realty Trust.

Profitability

This table compares Sotherly Hotels and Digital Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	0.92%	3.48%	0.41%
Digital Realty Trust	8.04%	2.24%	1.00%

Summary

Digital Realty Trust beats Sotherly Hotels on 11 of the 15 factors compared between the two stocks.

About Sotherly Hotels

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

About Digital Realty Trust

Digital Realty Trust, Inc. operates as a real estate investment trust, which engages in the provision of data center, colocation and interconnection solutions. It serves the following industries: artificial intelligence (AI), networks, cloud, digital media, mobile, financial services, healthcare, and gaming. The company was founded on March 9, 2004, and is headquartered in Dallas, TX.