Sotherly Hotels (NASDAQ:SOHO) and Generation Income Properties (NASDAQ:GIPR) Critical Review

Sotherly Hotels (NASDAQ:SOHO) and Generation Income Properties (NASDAQ:GIPR) are both small-cap real estate companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Sotherly Hotels and Generation Income Properties, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotherly Hotels	0	1	0	0	2.00
Generation Income Properties	0	0	1	0	3.00

Sotherly Hotels currently has a consensus target price of $2.25, indicating a potential upside of 81.45%. Generation Income Properties has a consensus target price of $5.00, indicating a potential upside of 37.74%. Given Sotherly Hotels’ higher probable upside, analysts clearly believe Sotherly Hotels is more favorable than Generation Income Properties.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sotherly Hotels	2.27%	7.81%	0.98%
Generation Income Properties	-74.91%	-79.71%	-6.63%

Insider and Institutional Ownership

27.5% of Sotherly Hotels shares are owned by institutional investors. Comparatively, 20.7% of Generation Income Properties shares are owned by institutional investors. 14.6% of Sotherly Hotels shares are owned by company insiders. Comparatively, 11.5% of Generation Income Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Sotherly Hotels and Generation Income Properties’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotherly Hotels	$173.84 million	0.14	$3.94 million	($0.21)	-5.90
Generation Income Properties	$7.59 million	2.59	-$5.72 million	($2.42)	-1.50

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

Volatility & Risk

Sotherly Hotels has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500. Comparatively, Generation Income Properties has a beta of -0.18, indicating that its share price is 118% less volatile than the S&P 500.

Summary

Sotherly Hotels beats Generation Income Properties on 10 of the 14 factors compared between the two stocks.

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.

About Generation Income Properties

Generation Income Properties, Inc., located in Tampa, Florida, is an internally managed real estate investment trust formed to acquire and own, directly and jointly, real estate investments focused on retail, office, and industrial net lease properties in densely populated submarkets.