Marriott International (NASDAQ: MAR) and Red Rock Resorts (NASDAQ:RRR) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.
Institutional and Insider Ownership
63.9% of Marriott International shares are owned by institutional investors. Comparatively, 59.5% of Red Rock Resorts shares are owned by institutional investors. 13.0% of Marriott International shares are owned by insiders. Comparatively, 0.4% of Red Rock Resorts shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Marriott International pays an annual dividend of $1.64 per share and has a dividend yield of 1.3%. Red Rock Resorts pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Marriott International pays out 37.6% of its earnings in the form of a dividend. Red Rock Resorts pays out 64.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Marriott International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Marriott International and Red Rock Resorts’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Marriott International||$22.89 billion||1.93||$1.37 billion||$4.36||28.73|
|Red Rock Resorts||$1.62 billion||2.37||$35.15 million||$0.62||53.13|
Marriott International has higher revenue and earnings than Red Rock Resorts. Marriott International is trading at a lower price-to-earnings ratio than Red Rock Resorts, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Marriott International has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Red Rock Resorts has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for Marriott International and Red Rock Resorts, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Red Rock Resorts||0||4||6||0||2.60|
Marriott International currently has a consensus price target of $132.85, suggesting a potential upside of 6.06%. Red Rock Resorts has a consensus price target of $33.44, suggesting a potential upside of 1.53%. Given Marriott International’s higher possible upside, equities analysts clearly believe Marriott International is more favorable than Red Rock Resorts.
This table compares Marriott International and Red Rock Resorts’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Red Rock Resorts||4.11%||16.46%||2.79%|
Marriott International beats Red Rock Resorts on 12 of the 16 factors compared between the two stocks.
Marriott International Company Profile
Marriott International, Inc. operates, franchises, and licenses hotel, residential, and timeshare properties worldwide. The company operates through three segments: North American Full-Service, North American Limited-Service, and Asia Pacific. It operates its properties under the JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, EDITION, Bulgari, Marriott Hotels, Sheraton, Westin, Renaissance, Le Méridien, Autograph Collection, Delta Hotels, Gaylord Hotels, Marriott Executive Apartments, Marriott Vacation Club, Tribute Portfolio, Design Hotels, Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, Four Points, TownePlace Suites, Aloft, AC Hotels by Marriott, Protea Hotels, Element, and Moxy brand names. As of June 7, 2018, it operated, franchised, and licensed approximately 6,500 properties in 127 countries and territories. Marriott International, Inc. was founded in 1927 and is headquartered in Bethesda, Maryland.
Red Rock Resorts Company Profile
Red Rock Resorts, Inc., through its interest in Station Holdco and Station LLC, engages in casino entertainment, and gaming and entertainment businesses in the United States. It operates through two segments, Las Vegas operations and Native American management. The company develops, manages, and operates casino entertainment properties; and owns and operates 10 gaming and entertainment facilities, and 10 smaller casinos in the Las Vegas regional market. In addition, it manages Graton Resort in Sonoma County, California; and Gun Lake in Allegan County, Michigan. It operates 19,219 slot machines; 319 table games; and 4,316 hotel rooms. The company was formerly known as Station Casinos Corp. and changed its name to Red Rock Resorts, Inc. in January 2016. Red Rock Resorts, Inc. is based in Las Vegas, Nevada.
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