For over two years now, the housing market has been a seemingly perpetual slump. And with would-be travelers forsaking vacations for staycations, hotels haven't fared any better. All this has impatient investors wondering, when are they ever going to bounce back?

There are currently two competing schools of thought with regard to recovery. In one corner, you have the optimists claiming that now's the time to get in on the ground floor of an upswing. Bernie Schaeffer, editor of Option Advisor, is among this camp, seeing near-term opportunity in homebuilding company Lennar (NYSE: LEN) and hotel operator Marriott International (NYSE: MAR).

According to Schaeffer, "the housing sector continues to be dogged by negative sentiment, and Lennar is no exception" -- but that said, "the stock has actually added more than 15% in 2010, easily outperforming the SPX."

What's more, hotel giant Marriott has seen a steady uptick since March; business has not only kept pace, it's been good enough to merit price increases.

Then again, the housing sector has already lost some of the momentum it started to gain, with PulteGroup (NYSE: PHM) leading the pack right back into the ground.

And of the hotel chains that survived the weight of their massive debt, it's hard to say if any of them will be able to turn things around quickly enough to turn a profit anytime soon.

Looks like hotels and hospitality may still have a long way to go toward recovery, so there's still a good deal of risk that comes along with investing in them. But that doesn't mean that all stocks in these sectors are necessarily bad bets. The key is to find companies with the financials to withstand what may be a very bumpy ride.

So, which housing and hospitality stocks have the strongest financials? We narrowed down a universe of housing and hotels stocks to a smaller list of companies with solid financials. (Click here to access free interactive tools to analyze these investing ideas.)

For our purposes, we defined solid financials by quick ratio, a measure of a company's short-term liquidity, and interest coverage ratio, which reveals how easily a company can pay interest on its outstanding debt. All these data points have been sourced from Reuters.

Use this list as a starting point for your own analysis:

Company

Quick Ratio (MRQ)

Interest Coverage Ratio (MRQ)

Red Lion Hotels (NYSE: RLH) 0.7 vs. industry average at 0.53 0.67 vs. industry average at 0.21
Fortune Brands (NYSE: FO) 1.02 vs. industry average at 0.82 0.63 vs. industry average at 0.34
Sealy (NYSE: ZZ) 1.45 vs. industry average at 1.19 0.58 vs. industry average at 0.34

Interactive Chart: Click the time line on top of the chart to evaluate performance over different time intervals.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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