Financial Analysis: Four Corners Property Trust (NYSE:FCPT) vs. DiamondRock Hospitality (NYSE:DRH)

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

Dividends

Four Corners Property Trust pays an annual dividend of $1.42 per share and has a dividend yield of 5.1%. DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. Four Corners Property Trust pays out 132.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DiamondRock Hospitality pays out 42.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations and price targets for Four Corners Property Trust and DiamondRock Hospitality, as reported by MarketBeat.

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

Four Corners Property Trust currently has a consensus price target of $30.50, suggesting a potential upside of 9.32%. DiamondRock Hospitality has a consensus price target of $10.10, suggesting a potential upside of 11.66%. Given DiamondRock Hospitality’s higher possible upside, analysts plainly believe DiamondRock Hospitality is more favorable than Four Corners Property Trust.

Insider and Institutional Ownership

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

Profitability

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

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

Risk & Volatility

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

Earnings and Valuation

This table compares Four Corners Property Trust and DiamondRock Hospitality”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Four Corners Property Trust	$264.88 million	10.19	$95.34 million	$1.07	26.07
DiamondRock Hospitality	$1.07 billion	1.75	$86.34 million	$0.28	32.30

Four Corners Property Trust has higher earnings, but lower revenue 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.

Summary

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

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.

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.