Contrasting Sotherly Hotels (NASDAQ:SOHO) and Phillips Edison & Company, Inc. (NASDAQ:PECO)

Sotherly Hotels (NASDAQ:SOHO) and Phillips Edison & Company, Inc. (NASDAQ:PECO) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Earnings and Valuation

This table compares Sotherly Hotels and Phillips Edison & Company, Inc.”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$178.57 million	0.13	$3.94 million	($0.24)	-5.02
Phillips Edison & Company, Inc.	$642.79 million	7.21	$56.85 million	$0.46	82.20

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

Profitability

This table compares Sotherly Hotels and Phillips Edison & Company, Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	1.88%	6.82%	0.84%
Phillips Edison & Company, Inc.	9.03%	2.22%	1.18%

Analyst Ratings

This is a breakdown of current ratings and price targets for Sotherly Hotels and Phillips Edison & Company, Inc., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	1	0	0	2.00
Phillips Edison & Company, Inc.	0	4	2	0	2.33

Sotherly Hotels presently has a consensus target price of $1.50, suggesting a potential upside of 24.48%. Phillips Edison & Company, Inc. has a consensus target price of $37.50, suggesting a potential downside of 0.82%. Given Sotherly Hotels’ higher possible upside, analysts plainly believe Sotherly Hotels is more favorable than Phillips Edison & Company, Inc..

Insider and Institutional Ownership

27.5% of Sotherly Hotels shares are held by institutional investors. Comparatively, 80.7% of Phillips Edison & Company, Inc. shares are held by institutional investors. 15.9% of Sotherly Hotels shares are held by company insiders. Comparatively, 8.0% of Phillips Edison & Company, Inc. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Sotherly Hotels pays an annual dividend of $0.52 per share and has a dividend yield of 43.2%. Phillips Edison & Company, Inc. pays an annual dividend of $1.23 per share and has a dividend yield of 3.3%. Sotherly Hotels pays out -216.7% of its earnings in the form of a dividend. Phillips Edison & Company, Inc. pays out 267.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sotherly Hotels is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Sotherly Hotels has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500. Comparatively, Phillips Edison & Company, Inc. has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

Phillips Edison & Company, Inc. beats Sotherly Hotels on 10 of the 16 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 Phillips Edison & Company, Inc.

Phillips Edison & Company, Inc. (PECO) is one of the nation's largest owners and operators of omni-channel grocery-anchored shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO's centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO's top grocery anchors include Kroger, Publix, Albertsons and Ahold Delhaize. As of December 31, 2023, PECO managed 301 shopping centers, including 281 wholly-owned centers comprising 32.2 million square feet across 31 states and 20 shopping centers owned in one institutional joint venture. PECO is exclusively focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.