Choice Hotels (NYSE: CHH) and China Lodging Group (NASDAQ:HTHT) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.
This is a summary of current recommendations and price targets for Choice Hotels and China Lodging Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Lodging Group||0||0||3||0||3.00|
Choice Hotels currently has a consensus target price of $80.50, suggesting a potential upside of 0.31%. China Lodging Group has a consensus target price of $40.00, suggesting a potential downside of 77.15%. Given Choice Hotels’ higher probable upside, equities analysts plainly believe Choice Hotels is more favorable than China Lodging Group.
Valuation & Earnings
This table compares Choice Hotels and China Lodging Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Choice Hotels||$1.01 billion||4.51||$114.89 million||$2.88||27.86|
|China Lodging Group||$1.26 billion||10.16||$190.15 million||$2.60||67.33|
China Lodging Group has higher revenue and earnings than Choice Hotels. Choice Hotels is trading at a lower price-to-earnings ratio than China Lodging Group, indicating that it is currently the more affordable of the two stocks.
Choice Hotels pays an annual dividend of $0.86 per share and has a dividend yield of 1.1%. China Lodging Group does not pay a dividend. Choice Hotels pays out 29.9% of its earnings in the form of a dividend. Choice Hotels has increased its dividend for 4 consecutive years.
Risk and Volatility
Choice Hotels has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, China Lodging Group has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500.
Institutional and Insider Ownership
51.7% of Choice Hotels shares are held by institutional investors. Comparatively, 37.4% of China Lodging Group shares are held by institutional investors. 24.4% of Choice Hotels shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Choice Hotels and China Lodging Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Lodging Group||13.89%||21.24%||7.74%|
China Lodging Group beats Choice Hotels on 10 of the 17 factors compared between the two stocks.
Choice Hotels Company Profile
Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. It operates through Hotel Franchising and SkyTouch Technology segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. It also develops and markets cloud-based technology products to the hotel industry, including inventory management, pricing, and connectivity to third party channels and hoteliers; and provides onsite and remote installation, training, and phone support services. As of March 28, 2018, the company franchised approximately 6,800 hotels with 500,000 rooms. Choice Hotels International, Inc. was founded in 1939 and is based in Rockville, Maryland.
China Lodging Group Company Profile
China Lodging Group, Limited, together with its subsidiaries, develops and operates leased and owned, manachised, and franchised hotels primarily in the People's Republic of China. The company operates hotels under the Hi Inn, HanTing Hotel, Elan Hotel, Orange Hotel, HanTing Premium, Starway Hotel, JI Hotel, Orange Hotel Select, Manxin Hotel, Crystal Orange Hotel, Joya Hotel, Grand Mercure, Novotel, Mercure, Ibis Styles, and Ibis brand names for business and leisure travelers. As of December 31, 2017, it had 671 leased and owned hotels; 2,874 manachised hotels; and 201 franchised hotels in operation, as well as 37 leased and owned hotels, and 659 manachised and franchised hotels under development. China Lodging Group, Limited was incorporated in 2007 and is headquartered in Shanghai, the People's Republic of China.
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