Critical Comparison: Centerspace (NYSE:CSR) versus RLJ Lodging Trust (NYSE:RLJ)

RLJ Lodging Trust (NYSE:RLJ) and Centerspace (NYSE:CSR) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Institutional & Insider Ownership

92.3% of RLJ Lodging Trust shares are owned by institutional investors. Comparatively, 79.0% of Centerspace shares are owned by institutional investors. 2.6% of RLJ Lodging Trust shares are owned by insiders. Comparatively, 0.9% of Centerspace shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RLJ Lodging Trust	4.93%	3.34%	1.35%
Centerspace	-2.16%	-0.67%	-0.29%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for RLJ Lodging Trust and Centerspace, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLJ Lodging Trust	1	3	4	0	2.38
Centerspace	0	3	3	0	2.50

RLJ Lodging Trust currently has a consensus price target of $12.69, suggesting a potential upside of 33.55%. Centerspace has a consensus price target of $72.29, suggesting a potential downside of 3.36%. Given RLJ Lodging Trust’s higher possible upside, equities research analysts plainly believe RLJ Lodging Trust is more favorable than Centerspace.

Risk and Volatility

RLJ Lodging Trust has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, Centerspace has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Dividends

RLJ Lodging Trust pays an annual dividend of $0.60 per share and has a dividend yield of 6.3%. Centerspace pays an annual dividend of $3.00 per share and has a dividend yield of 4.0%. 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. Centerspace pays out -375.0% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares RLJ Lodging Trust and Centerspace’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLJ Lodging Trust	$1.35 billion	1.10	$76.40 million	$0.28	33.93
Centerspace	$261.31 million	4.38	$41.97 million	($0.80)	-93.50

RLJ Lodging Trust has higher revenue and earnings than Centerspace. Centerspace 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.

Summary

RLJ Lodging Trust beats Centerspace on 13 of the 16 factors compared between the two stocks.

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.

About Centerspace

Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune.