Service Properties Trust (NASDAQ:SVC) and American Hotel Income Properties REIT (OTCMKTS:AHOTF) Critical Contrast

American Hotel Income Properties REIT (OTCMKTS:AHOTF) and Service Properties Trust (NASDAQ:SVC) are both real estate companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares American Hotel Income Properties REIT and Service Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Hotel Income Properties REIT	N/A	N/A	N/A
Service Properties Trust	-10.56%	-17.17%	-2.72%

Dividends

American Hotel Income Properties REIT pays an annual dividend of $0.76 per share and has a dividend yield of 147.3%. Service Properties Trust pays an annual dividend of $0.80 per share and has a dividend yield of 16.5%. American Hotel Income Properties REIT pays out 1,245.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Service Properties Trust pays out -95.2% of its earnings in the form of a dividend.

Insider & Institutional Ownership

10.3% of American Hotel Income Properties REIT shares are owned by institutional investors. Comparatively, 77.6% of Service Properties Trust shares are owned by institutional investors. 1.4% of Service Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares American Hotel Income Properties REIT and Service Properties Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Hotel Income Properties REIT	N/A	N/A	N/A	$0.06	8.45
Service Properties Trust	$1.89 billion	0.43	-$32.78 million	($0.84)	-5.77

American Hotel Income Properties REIT has higher earnings, but lower revenue than Service Properties Trust. Service Properties Trust is trading at a lower price-to-earnings ratio than American Hotel Income Properties REIT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for American Hotel Income Properties REIT and Service Properties Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Hotel Income Properties REIT	0	0	0	0	N/A
Service Properties Trust	1	1	1	0	2.00

Service Properties Trust has a consensus target price of $6.67, indicating a potential upside of 37.46%. Given Service Properties Trust’s higher probable upside, analysts plainly believe Service Properties Trust is more favorable than American Hotel Income Properties REIT.

About American Hotel Income Properties REIT

American Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), or AHIP, is a limited partnership formed to invest in hotel real estate properties across the United States. AHIP's portfolio of premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. AHIP's long-term objectives are to build on its proven track record of successful investment, deliver monthly U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.