Contrasting VICI Properties (NYSE:VICI) & DiamondRock Hospitality (NYSE:DRH)

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

Valuation and Earnings

This table compares VICI Properties and DiamondRock Hospitality’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VICI Properties	$3.61 billion	8.00	$2.51 billion	$2.53	10.94
DiamondRock Hospitality	$1.07 billion	1.61	$86.34 million	$0.36	22.89

VICI Properties has higher revenue and earnings than DiamondRock Hospitality. VICI Properties is trading at a lower price-to-earnings ratio than DiamondRock Hospitality, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

97.7% of VICI Properties shares are held by institutional investors. 0.3% of VICI Properties shares are held by insiders. Comparatively, 1.4% of DiamondRock Hospitality shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for VICI Properties and DiamondRock Hospitality, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VICI Properties	0	3	7	0	2.70
DiamondRock Hospitality	0	3	2	0	2.40

VICI Properties currently has a consensus price target of $33.50, suggesting a potential upside of 20.98%. DiamondRock Hospitality has a consensus price target of $10.30, suggesting a potential upside of 25.00%. Given DiamondRock Hospitality’s higher possible upside, analysts clearly believe DiamondRock Hospitality is more favorable than VICI Properties.

Dividends

VICI Properties pays an annual dividend of $1.66 per share and has a dividend yield of 6.0%. DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.5%. VICI Properties pays out 65.6% of its earnings in the form of a dividend. DiamondRock Hospitality pays out 33.3% 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.

Risk & Volatility

VICI Properties has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, DiamondRock Hospitality has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Profitability

This table compares VICI Properties and DiamondRock Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VICI Properties	70.13%	10.33%	5.97%
DiamondRock Hospitality	7.86%	5.20%	2.64%

Summary

VICI Properties beats DiamondRock Hospitality on 11 of the 16 factors compared between the two stocks.

About VICI Properties

VICI Properties Inc. is an S&P 500 experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality and entertainment destinations, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas, three of the most iconic entertainment facilities on the Las Vegas Strip. VICI Properties owns 93 experiential assets across a geographically diverse portfolio consisting of 54 gaming properties and 39 other experiential properties across the United States and Canada. The portfolio is comprised of approximately 127 million square feet and features approximately 60,300 hotel rooms and over 500 restaurants, bars, nightclubs and sportsbooks. Its properties are occupied by industry-leading gaming, leisure and hospitality operators under long-term, triple-net lease agreements. VICI Properties has a growing array of real estate and financing partnerships with leading operators in other experiential sectors, including Bowlero, Cabot, Canyon Ranch, Chelsea Piers, Great Wolf Resorts, Homefield, and Kalahari Resorts. VICI Properties also owns four championship golf courses and 33 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip. VICI Properties' goal is to create the highest quality and most productive experiential real estate portfolio through a strategy of partnering with the highest quality experiential place makers and operators.

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.