Critical Analysis: Gaming and Leisure Properties (GLPI) and Chesapeake Lodging Trust (CHSP)

Gaming and Leisure Properties (NASDAQ: GLPI) and Chesapeake Lodging Trust (NYSE:CHSP) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Dividends

Gaming and Leisure Properties pays an annual dividend of $2.52 per share and has a dividend yield of 6.7%. Chesapeake Lodging Trust pays an annual dividend of $1.60 per share and has a dividend yield of 6.2%. Gaming and Leisure Properties pays out 141.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Lodging Trust pays out 164.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Lodging Trust has raised its dividend for 5 consecutive years. Gaming and Leisure Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Gaming and Leisure Properties has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Chesapeake Lodging Trust has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Gaming and Leisure Properties and Chesapeake Lodging Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gaming and Leisure Properties 1 3 3 0 2.29
Chesapeake Lodging Trust 0 3 1 0 2.25

Gaming and Leisure Properties presently has a consensus price target of $38.80, indicating a potential upside of 3.14%. Chesapeake Lodging Trust has a consensus price target of $24.50, indicating a potential downside of 4.74%. Given Gaming and Leisure Properties’ stronger consensus rating and higher possible upside, equities analysts plainly believe Gaming and Leisure Properties is more favorable than Chesapeake Lodging Trust.

Earnings and Valuation

This table compares Gaming and Leisure Properties and Chesapeake Lodging Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gaming and Leisure Properties $958.18 million 8.34 $716.53 million $1.78 21.13
Chesapeake Lodging Trust $606.99 million 2.50 $175.85 million $0.97 26.52

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

Insider and Institutional Ownership

89.4% of Gaming and Leisure Properties shares are held by institutional investors. Comparatively, 98.5% of Chesapeake Lodging Trust shares are held by institutional investors. 5.9% of Gaming and Leisure Properties shares are held by company insiders. Comparatively, 2.2% of Chesapeake Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Gaming and Leisure Properties and Chesapeake Lodging Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gaming and Leisure Properties 38.99% 17.14% 5.71%
Chesapeake Lodging Trust 10.77% 5.53% 3.19%

Summary

Gaming and Leisure Properties beats Chesapeake Lodging Trust on 14 of the 17 factors compared between the two stocks.

About Gaming and Leisure Properties

Gaming and Leisure Properties, Inc. (GLPI) is a self-administered and self-managed Pennsylvania real estate investment trust (REIT). The Company is engaged in the business of acquiring, financing and owning real estate property to be leased to gaming operators in triple net lease arrangements. Its segments include GLP Capital, L.P. (GLP Capital), through which the Company owns all of its real estate assets, and the TRS Properties, which consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. The GLP Capital segment consists of the leased real property. As of December 31, 2016, the Company had 34 rental properties, consisting of the real property associated with 18 gaming and related facilities operated by Penn National Gaming, Inc. (Penn), the real property associated with 15 gaming and related facilities operated by Pinnacle Entertainment, Inc. (Pinnacle), and the real property associated with the Casino Queen in East St. Louis, Illinois.

About Chesapeake Lodging Trust

Chesapeake Lodging Trust is a real estate investment trust. The Company is focused on investments primarily in upper-upscale hotels in various business and convention markets and, on a selective basis, select-service hotels in urban settings or other locations in the United States. The Company operates through the hotel ownership segment. The Company conducts its operations primarily though Chesapeake Lodging, L.P., its operating partnership (the Operating Partnership). As of February 17, 2017, the Company owned 22 hotels. As of February 17, 2017, the Company’s portfolio included Hyatt Regency Boston; Hilton Checkers Los Angeles; Boston Marriott Newton; Le Meridien San Francisco; Hotel Indigo San Diego Gaslamp Quarter; Courtyard Washington Capitol Hill/Navy Yard; Hotel Adagio San Francisco, Autograph Collection; Denver Marriott City Center; Hyatt Herald Square New York, and Ace Hotel and Theater Downtown Los Angeles. As of February 17, 2017, the Company’s hotels had 6,694 rooms.

Receive News & Ratings for Gaming and Leisure Properties Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Gaming and Leisure Properties Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply