RLJ Lodging Trust (NYSE:RLJ) versus Peakstone Realty Trust (NYSE:PKST) Financial Analysis

Peakstone Realty Trust (NYSE:PKST) and RLJ Lodging Trust (NYSE:RLJ) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Dividends

Peakstone Realty Trust pays an annual dividend of $0.90 per share and has a dividend yield of 6.6%. RLJ Lodging Trust pays an annual dividend of $0.60 per share and has a dividend yield of 6.5%. Peakstone Realty Trust pays out -5.8% of its earnings in the form of a dividend. RLJ Lodging Trust pays out 214.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Peakstone Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Peakstone Realty Trust and RLJ Lodging Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peakstone Realty Trust	-60.76%	-12.06%	-5.25%
RLJ Lodging Trust	4.93%	3.34%	1.35%

Risk and Volatility

Peakstone Realty Trust has a beta of 2.63, suggesting that its stock price is 163% more volatile than the S&P 500. Comparatively, RLJ Lodging Trust has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500.

Institutional and Insider Ownership

39.0% of Peakstone Realty Trust shares are owned by institutional investors. Comparatively, 92.3% of RLJ Lodging Trust shares are owned by institutional investors. 0.4% of Peakstone Realty Trust shares are owned by insiders. Comparatively, 2.6% of RLJ Lodging Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Peakstone Realty Trust and RLJ Lodging Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peakstone Realty Trust	$254.28 million	1.95	-$550.58 million	($15.55)	-0.88
RLJ Lodging Trust	$1.35 billion	1.06	$76.40 million	$0.28	32.79

RLJ Lodging Trust has higher revenue and earnings than Peakstone Realty Trust. Peakstone Realty Trust is trading at a lower price-to-earnings ratio than RLJ Lodging Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Peakstone Realty Trust and RLJ Lodging Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peakstone Realty Trust	0	1	0	0	2.00
RLJ Lodging Trust	2	2	3	0	2.14

Peakstone Realty Trust presently has a consensus price target of $13.00, suggesting a potential downside of 4.62%. RLJ Lodging Trust has a consensus price target of $12.14, suggesting a potential upside of 32.28%. Given RLJ Lodging Trust’s stronger consensus rating and higher probable upside, analysts plainly believe RLJ Lodging Trust is more favorable than Peakstone Realty Trust.

Summary

RLJ Lodging Trust beats Peakstone Realty Trust on 12 of the 16 factors compared between the two stocks.

About Peakstone Realty Trust

Peakstone Realty Trust (NYSE: PKST) is an internally managed, real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. These assets are generally leased to creditworthy tenants under long-term net lease agreements with contractual rent escalations. As of March 31, 2023, Peakstone's wholly-owned portfolio consists of 19 million square feet across 24 states in primarily high-growth, strategic coastal and sunbelt markets.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.