Analyzing One Liberty Properties (NYSE:OLP) and Sotherly Hotels (NASDAQ:SOHO)

One Liberty Properties (NYSE:OLP) and Sotherly Hotels (NASDAQ:SOHO) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Dividends

One Liberty Properties pays an annual dividend of $1.80 per share and has a dividend yield of 6.6%. Sotherly Hotels pays an annual dividend of $0.52 per share and has a dividend yield of 37.1%. One Liberty Properties pays out 119.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sotherly Hotels pays out -247.6% of its earnings in the form of a dividend. Sotherly Hotels is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

36.2% of One Liberty Properties shares are owned by institutional investors. Comparatively, 27.5% of Sotherly Hotels shares are owned by institutional investors. 25.4% of One Liberty Properties shares are owned by company insiders. Comparatively, 15.9% of Sotherly Hotels shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

One Liberty Properties has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Sotherly Hotels has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500.

Earnings & Valuation

This table compares One Liberty Properties and Sotherly Hotels”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
One Liberty Properties	$90.65 million	6.45	$29.61 million	$1.51	18.15
Sotherly Hotels	$178.57 million	0.16	$3.94 million	($0.21)	-6.67

One Liberty Properties has higher earnings, but lower revenue than Sotherly Hotels. Sotherly Hotels is trading at a lower price-to-earnings ratio than One Liberty Properties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares One Liberty Properties and Sotherly Hotels’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
One Liberty Properties	36.11%	10.58%	4.26%
Sotherly Hotels	1.88%	6.82%	0.84%

Analyst Ratings

This is a breakdown of current recommendations and price targets for One Liberty Properties and Sotherly Hotels, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
One Liberty Properties	0	0	1	0	3.00
Sotherly Hotels	0	1	0	0	2.00

One Liberty Properties currently has a consensus target price of $28.00, indicating a potential upside of 2.19%. Sotherly Hotels has a consensus target price of $1.50, indicating a potential upside of 7.14%. Given Sotherly Hotels’ higher possible upside, analysts clearly believe Sotherly Hotels is more favorable than One Liberty Properties.

Summary

One Liberty Properties beats Sotherly Hotels on 11 of the 16 factors compared between the two stocks.

About One Liberty Properties

One Liberty is a self-administered and self-managed real estate investment trust incorporated in Maryland in 1982. The Company acquires, owns and manages a geographically diversified portfolio consisting primarily of industrial and retail properties. Many of these properties are subject to long-term net leases under which the tenant is typically responsible for the property’s real estate taxes, insurance and ordinary maintenance and repairs.

About Sotherly Hotels

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.