Reviewing Sotherly Hotels (NASDAQ:SOHO) and SBA Communications (NASDAQ:SBAC)

Sotherly Hotels (NASDAQ:SOHO) and SBA Communications (NASDAQ:SBAC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Profitability

This table compares Sotherly Hotels and SBA Communications’ 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%
SBA Communications	25.76%	-13.13%	6.83%

Insider and Institutional Ownership

27.5% of Sotherly Hotels shares are held by institutional investors. Comparatively, 97.3% of SBA Communications shares are held by institutional investors. 15.9% of Sotherly Hotels shares are held by insiders. Comparatively, 1.3% of SBA Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Sotherly Hotels and SBA Communications”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$180.09 million	0.11	$3.94 million	($0.33)	-2.90
SBA Communications	$2.66 billion	9.16	$501.81 million	$6.34	35.74

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

Analyst Recommendations

This is a summary of recent recommendations for Sotherly Hotels and SBA Communications, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	1	0	0	2.00
SBA Communications	0	3	9	1	2.85

Sotherly Hotels presently has a consensus price target of $1.50, indicating a potential upside of 56.81%. SBA Communications has a consensus price target of $257.23, indicating a potential upside of 13.52%. Given Sotherly Hotels’ higher probable upside, equities analysts plainly believe Sotherly Hotels is more favorable than SBA Communications.

Dividends

Sotherly Hotels pays an annual dividend of $0.52 per share and has a dividend yield of 54.4%. SBA Communications pays an annual dividend of $3.92 per share and has a dividend yield of 1.7%. Sotherly Hotels pays out -157.6% of its earnings in the form of a dividend. SBA Communications pays out 61.8% 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. Sotherly Hotels is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Sotherly Hotels has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, SBA Communications has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Summary

SBA Communications beats Sotherly Hotels on 11 of the 17 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 SBA Communications

SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 39,000 communications sites throughout the Americas, Africa and in Asia, SBA is listed on NASDAQ under the symbol SBAC. Our organization is part of the S&P 500 and is one of the top Real Estate Investment Trusts (REITs) by market capitalization.