DiamondRock Hospitality Company (DRH) vs Service Properties Trust (SVC)

DiamondRock Hospitality Company and Service Properties Trust are both Reit Hotel & Motel companies. DiamondRock Hospitality Company is the larger, with a market value of $2.7B against $801.7M — 3.4× the size. Service Properties Trust has negative trailing earnings, so its P/E is not meaningful; DiamondRock Hospitality Company trades at 18.4×. DiamondRock Hospitality Company grew revenue faster over the last twelve months: 1.03% against −11.9%. DiamondRock Hospitality Company has the higher net margin (13.1% vs −25.4%) and the higher return on invested capital (4.62% vs −1.68%). Both pay a dividend; Service Properties Trust yields more (4.07% vs 2.16%). Across the 21 metrics below, DiamondRock Hospitality Company leads on 13 and Service Properties Trust on 8.

Valuation

Metric DRH SVC Reit Hotel & Motel median
P/E 18.38 n/m 26.14
P/S 2.42 0.47 1.47
P/B 1.80 0.98 1.05
Price to free cash flow 14.24 1.15 7.55
EV/EBITDA 12.36 8.13 12.25
EV/Sales 3.26 1.48 2.83
Earnings yield 5.44% (125.20%) (0.37%)
Free cash flow yield 7.02% 86.68% 7.02%

Profitability

Metric DRH SVC Reit Hotel & Motel median
Gross margin 37.37% 33.86% 37.37%
Operating margin 16.16% (4.01%) 9.53%
Net margin 13.09% (25.44%) (0.66%)
Free cash flow margin 17.01% 41.09% 17.01%
Return on equity 9.56% (56.28%) 0.53%
Return on assets 4.86% (6.62%) (0.26%)
Return on invested capital 4.62% (1.68%) 2.16%

Growth

Metric DRH SVC Reit Hotel & Motel median
Revenue growth (TTM) 1.03% (11.91%) 1.17%
EPS growth (last fiscal year) 144.44% 26.95% (16.85%)
Revenue growth, 5-year CAGR 30.20% 7.48% 24.43%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric DRH SVC Reit Hotel & Motel median
Debt to equity 0.72 2.11 0.83
Current ratio 1.87 0.01 1.34
Net debt to EBITDA 3.59 6.01 5.14

Dividend

Metric DRH SVC Reit Hotel & Motel median
Dividend yield 2.16% 4.07% 3.15%
Payout ratio 0.40 — 1.24

Size

Metric DRH SVC Reit Hotel & Motel median
Market cap 2.73b 801.66m 1.78b

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