Analyzing Digital Realty Trust (NYSE:DLR) & Host Hotels & Resorts (NASDAQ:HST)

Host Hotels & Resorts (NASDAQ:HST) and Digital Realty Trust (NYSE:DLR) are both large-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Host Hotels & Resorts	13.70%	11.08%	6.07%
Digital Realty Trust	20.58%	5.93%	2.61%

Volatility and Risk

Host Hotels & Resorts has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Host Hotels & Resorts and Digital Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Host Hotels & Resorts	1	3	10	0	2.64
Digital Realty Trust	1	9	10	1	2.52

Host Hotels & Resorts presently has a consensus target price of $21.29, suggesting a potential upside of 22.47%. Digital Realty Trust has a consensus target price of $158.33, suggesting a potential downside of 4.50%. Given Host Hotels & Resorts’ stronger consensus rating and higher probable upside, research analysts plainly believe Host Hotels & Resorts is more favorable than Digital Realty Trust.

Institutional & Insider Ownership

98.5% of Host Hotels & Resorts shares are held by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are held by institutional investors. 1.3% of Host Hotels & Resorts shares are held by insiders. Comparatively, 0.2% of Digital Realty Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.9%. Host Hotels & Resorts pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Digital Realty Trust pays out 135.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Host Hotels & Resorts and Digital Realty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Host Hotels & Resorts	$5.47 billion	2.24	$740.00 million	$1.02	17.04
Digital Realty Trust	$5.46 billion	9.49	$948.84 million	$3.60	46.06

Digital Realty Trust has lower revenue, but higher earnings than Host Hotels & Resorts. Host Hotels & Resorts 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.

Summary

Host Hotels & Resorts beats Digital Realty Trust on 9 of the 16 factors compared between the two stocks.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is an S&P 500 company and is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. The Company currently owns 72 properties in the United States and five properties internationally totaling approximately 42,000 rooms. The Company also holds non-controlling interests in seven domestic and one international joint ventures. Guided by a disciplined approach to capital allocation and aggressive asset management, the Company partners with premium brands such as Marriott, Ritz-Carlton, Westin, Sheraton, W, St. Regis, The Luxury Collection, Hyatt, Fairmont, Hilton, Four Seasons, Swissôtel, ibis and Novotel, as well as independent brands.

About Digital Realty Trust

Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL, the company's global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across 25+ countries on six continents.