Pebblebrook Hotel Trust (PEB) versus MGM Growth Properties (MGP) Head to Head Analysis

Pebblebrook Hotel Trust (NYSE: PEB) and MGM Growth Properties (NYSE:MGP) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Risk & Volatility

Pebblebrook Hotel Trust has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, MGM Growth Properties has a beta of -1.31, meaning that its stock price is 231% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Pebblebrook Hotel Trust and MGM Growth Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pebblebrook Hotel Trust 2 2 3 0 2.14
MGM Growth Properties 0 1 4 0 2.80

Pebblebrook Hotel Trust presently has a consensus price target of $32.10, indicating a potential downside of 6.39%. MGM Growth Properties has a consensus price target of $31.20, indicating a potential upside of 1.53%. Given MGM Growth Properties’ stronger consensus rating and higher possible upside, analysts clearly believe MGM Growth Properties is more favorable than Pebblebrook Hotel Trust.

Valuation and Earnings

This table compares Pebblebrook Hotel Trust and MGM Growth Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pebblebrook Hotel Trust $796.77 million 2.97 $242.63 million $0.30 114.30
MGM Growth Properties $725.00 million 2.44 $613.53 million $0.77 39.91

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

Dividends

Pebblebrook Hotel Trust pays an annual dividend of $1.52 per share and has a dividend yield of 4.4%. MGM Growth Properties pays an annual dividend of $1.58 per share and has a dividend yield of 5.1%. Pebblebrook Hotel Trust pays out 506.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGM Growth Properties pays out 205.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pebblebrook Hotel Trust has increased its dividend for 4 consecutive years. MGM Growth Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Pebblebrook Hotel Trust and MGM Growth Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pebblebrook Hotel Trust 5.09% 2.59% 1.45%
MGM Growth Properties 6.21% 0.81% 0.48%

Summary

MGM Growth Properties beats Pebblebrook Hotel Trust on 9 of the 15 factors compared between the two stocks.

Pebblebrook Hotel Trust Company Profile

Pebblebrook Hotel Trust is an internally managed hotel investment company. The Company is a real estate investment trust (REIT) that acquires and invests in hotel properties located primarily in cities of the United States. As of December 31, 2016, the Company owned 29 hotels with a total of 7,219 guest rooms. The hotels are located in the markets: Atlanta (Buckhead), Georgia; Boston, Massachusetts; Miami (Coral Gables), Florida; Minneapolis, Minnesota; Naples, Florida; Nashville, Tennessee; New York, New York; Philadelphia, Pennsylvania; Portland, Oregon; San Diego, California; San Francisco, California; Santa Monica, California; Seattle, Washington; Stevenson, Washington; Washington, D.C.; West Hollywood, California, and Los Angeles (Beverly Hills), California. The Company’s assets are held by, and all of the operations are conducted through, Pebblebrook Hotel, L.P. (the Operating Partnership).

MGM Growth Properties Company Profile

MGM Growth Properties LLC is a real estate investment trust engaged in the acquisition, ownership and leasing of destination entertainment and leisure resorts, whose amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. Its portfolio consists of approximately 10 destination resorts. It has over six entertainment and gaming-related properties located on the Las Vegas Strip, including Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor and Excalibur, and The Park, a dining and entertainment complex located between New York-New York and Monte Carlo. Outside of Las Vegas, it owns over four casino resort properties, including MGM Grand Detroit in Detroit, Michigan, Borgata Hotel Casino & Spa in Atlantic City, New Jersey, and Beau Rivage and Gold Strike Tunica, both of which are located in Mississippi. It operates approximately 27,330 hotel rooms, over 200 restaurants, approximately 100 retail outlets and over 20 entertainment venues.

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