Financial Review: Equinix (NASDAQ:EQIX) versus Host Hotels & Resorts (NASDAQ:HST)

Host Hotels & Resorts (NASDAQ:HST – Get Rating) and Equinix (NASDAQ:EQIX – Get Rating) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Volatility & Risk

Host Hotels & Resorts has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Equinix has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Earnings & Valuation

This table compares Host Hotels & Resorts and Equinix’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Host Hotels & Resorts	$4.91 billion	2.44	$633.00 million	$1.12	15.02
Equinix	$7.26 billion	8.97	$704.34 million	$8.83	78.91

Equinix has higher revenue and earnings than Host Hotels & Resorts. Host Hotels & Resorts is trading at a lower price-to-earnings ratio than Equinix, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Host Hotels & Resorts and Equinix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Host Hotels & Resorts	15.42%	11.83%	6.60%
Equinix	10.84%	7.20%	2.72%

Institutional & Insider Ownership

97.1% of Host Hotels & Resorts shares are owned by institutional investors. Comparatively, 92.8% of Equinix shares are owned by institutional investors. 1.1% of Host Hotels & Resorts shares are owned by insiders. Comparatively, 0.3% of Equinix shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Host Hotels & Resorts pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. Equinix pays an annual dividend of $13.64 per share and has a dividend yield of 2.0%. Host Hotels & Resorts pays out 42.9% of its earnings in the form of a dividend. Equinix pays out 154.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equinix has raised its dividend for 8 consecutive years. Host Hotels & Resorts is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Host Hotels & Resorts and Equinix, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Host Hotels & Resorts	0	3	7	0	2.70
Equinix	0	4	13	1	2.83

Host Hotels & Resorts presently has a consensus target price of $20.86, indicating a potential upside of 24.04%. Equinix has a consensus target price of $780.28, indicating a potential upside of 11.98%. Given Host Hotels & Resorts’ higher possible upside, equities analysts clearly believe Host Hotels & Resorts is more favorable than Equinix.

About Host Hotels & Resorts

(Get Rating)

Host Hotels & Resorts, Inc. is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.

About Equinix

(Get Rating)

Equinix, Inc. engages in the provision of collocation space and develops data center solutions. The firm offers secure key management, consulting, network virtualization, customer support, and managed services. It operates through the following geographical segments: Americas, Europe, Middle East & Africa and Asia-Pacific. The company was founded by Jay Steven Adelson and Albert M. Avery, IV on June 22, 1998, and is headquartered in Redwood City, CA.