NasdaqGM:SOHO

Stock Analysis Report

Executive Summary

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.

Rewards

Trading at 48.1% below its fair value

Risk Analysis

Earnings have declined by -61.44% per year over past 5 years

Currently unprofitable and not forecast to become profitable over the next 3 years

Unstable dividend track record



Snowflake Analysis

Average dividend payer and slightly overvalued.


Similar Companies

Share Price & News

How has Sotherly Hotels's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SOHO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.9%

SOHO

2.3%

US REITs

0.8%

US Market


1 Year Return

0.2%

SOHO

20.0%

US REITs

25.1%

US Market

Return vs Industry: SOHO underperformed the US REITs industry which returned 17.9% over the past year.

Return vs Market: SOHO underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

SOHOIndustryMarket
7 Day0.9%2.3%0.8%
30 Day0.3%4.3%3.1%
90 Day0%0.3%10.9%
1 Year7.9%0.2%24.9%20.0%27.7%25.1%
3 Year18.5%-4.2%36.0%18.9%51.3%41.6%
5 Year18.4%-14.1%47.5%17.1%77.2%57.6%

Price Volatility Vs. Market

How volatile is Sotherly Hotels's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sotherly Hotels undervalued compared to its fair value and its price relative to the market?

47.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SOHO ($6.53) is trading below our estimate of fair value ($12.58)

Significantly Below Fair Value: SOHO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SOHO is unprofitable, so we can't compare its PE Ratio to the REITs industry average.

PE vs Market: SOHO is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SOHO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SOHO is overvalued based on its PB Ratio (2.3x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Sotherly Hotels forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

7.9%

Forecasted Real Estate industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Sotherly Hotels has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Sotherly Hotels performed over the past 5 years?

-61.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SOHO is currently unprofitable.

Growing Profit Margin: SOHO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SOHO is unprofitable, and losses have increased over the past 5 years at a rate of -61.4% per year.

Accelerating Growth: Unable to compare SOHO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SOHO is unprofitable, making it difficult to compare its past year earnings growth to the REITs industry (8.1%).


Return on Equity

High ROE: SOHO has a negative Return on Equity (0.053%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sotherly Hotels's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: SOHO has a high level of physical assets or inventory.

Debt Coverage by Assets: SOHO's debt is not covered by short term assets (assets are 0.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable SOHO has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: SOHO is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 17.1% per year.


Financial Institutions Analysis

Asset Level: SOHO's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if SOHO has a sufficient allowance for bad loans.

Low Risk Liabilities: SOHO reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if SOHO has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SOHO has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if SOHO has an appropriate level of bad loans.


Next Steps

Dividend

What is Sotherly Hotels's current dividend yield, its reliability and sustainability?

7.89%

Current Dividend Yield


Dividend Yield vs Market

company7.9%marketbottom25%1.4%markettop25%3.7%industryaverage3.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: SOHO's dividend (7.96%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: SOHO's dividend (7.96%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: SOHO's dividend payments have been volatile in the past 10 years.

Growing Dividend: SOHO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (84%), SOHO's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Sotherly Hotels's salary, the management and board of directors tenure and is there insider trading?

6.7yrs

Average board tenure


CEO

Dave Folsom (54yo)

0yrs

Tenure

US$582,891

Compensation

Mr. David R. Folsom, also known as Dave, has been the President of Sotherly Hotels Inc., the General Partner of Sotherly Hotels LP (formerly MHI Hospitality, L.P.) since January 19, 2011 and served as its  ...


CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD582.89K) is about average for companies of similar size in the US market ($USD519.76K).

Compensation vs Earnings: Dave's compensation has increased whilst the company is unprofitable.


Board Age and Tenure

6.7yrs

Average Tenure

57yo

Average Age

Experienced Board: SOHO's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$119,99525 Sep 19
Andrew Sims
EntityIndividual
Role
Chairman of the Board
Chairman
Shares17,751
Max PriceUS$6.76
SellUS$66820 Aug 19
Andrew Sims
EntityIndividual
Role
Chairman of the Board
Chairman
Shares99
Max PriceUS$6.75
SellUS$129,98315 Aug 19
Andrew Sims
EntityIndividual
Role
Chairman of the Board
Chairman
Shares19,126
Max PriceUS$6.87
SellUS$28,67221 Jun 19
Andrew Sims
EntityIndividual
Role
Chairman of the Board
Chairman
Shares4,000
Max PriceUS$7.17
SellUS$64,73814 Jun 19
David Folsom
EntityIndividual
Role
Chief Executive Officer
President & CEO
Shares8,517
Max PriceUS$7.60
SellUS$52,84113 Jun 19
Andrew Sims
EntityIndividual
Role
Chairman of the Board
Chairman
Shares7,000
Max PriceUS$7.57

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dave Folsom (54yo)

    President & CEO

    • Compensation: US$582.89k
  • Dave Surette (59yo)

    Corporate Controller

    • Tenure: 6yrs
  • Tony Domalski (57yo)

    VP, Secretary & CFO

    • Tenure: 7yrs
    • Compensation: US$605.86k
  • Scott Kucinski (37yo)

    Executive VP & COO

    • Ashley Kirkland

      Corporate Counsel & Operations Analyst

      • Bert Kirkland (36yo)

        General Counsel


        Board Members

        • Anthony Zinni (76yo)

          Independent Director

          • Tenure: 15.1yrs
          • Compensation: US$42.47k
        • Dave Folsom (54yo)

          President & CEO

          • Compensation: US$582.89k
        • Herschel Walker (57yo)

          Independent Director

          • Tenure: 4.8yrs
          • Compensation: US$42.47k
        • Ed Stein (72yo)

          Lead Independent Director

          • Compensation: US$54.97k
        • Drew Sims (62yo)

          Chairman

          • Tenure: 15.4yrs
          • Compensation: US$834.67k
        • George Gibson (53yo)

          Independent Director

          • Tenure: 2.8yrs
          • Compensation: US$47.72k
        • Maria Caldwell (55yo)

          Independent Director

          • Tenure: 0.8yrs

        Company Information

        Sotherly Hotels Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Sotherly Hotels Inc.
        • Ticker: SOHO
        • Exchange: NasdaqGM
        • Founded: 1957
        • Industry: Hotel and Resort REITs
        • Sector: Real Estate
        • Implied Market Cap: US$101.218m
        • Market Cap: US$89.809m
        • Shares outstanding: 15.41m
        • Website: https://www.sotherlyhotels.com

        Number of Employees


        Location

        • Sotherly Hotels Inc.
        • 306 South Henry Street
        • Suite 100
        • Williamsburg
        • Virginia
        • 23185
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        SOHONasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDDec 2004
        MCLDB (Deutsche Boerse AG)YesCommon StockDEEURDec 2004
        SOHO.BNasdaqGM (Nasdaq Global Market)PFD SER BUSUSDAug 2016
        SOHO.ONasdaqGM (Nasdaq Global Market)7.875% PFD SER CUSUSDOct 2017
        SOHO.NNasdaqGM (Nasdaq Global Market)8.25% CM PFD DUSUSDApr 2019

        Biography

        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. Currently, the Company’s portfolio consists of investments in twelve hotel properties, comprising 3,156 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide, Hyatt Hotels Corporation, and Marriott International, Inc. brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/21 23:57
        End of Day Share Price2020/01/21 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.