Marriott International (NASDAQ: MAR) and Hilton Worldwide Holdings (NYSE:HLT) are both large-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Institutional and Insider Ownership

67.1% of Marriott International shares are owned by institutional investors. 17.1% of Marriott International shares are owned by insiders. Comparatively, 1.5% of Hilton Worldwide Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Marriott International has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Hilton Worldwide Holdings has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Dividends

Marriott International pays an annual dividend of $1.32 per share and has a dividend yield of 1.3%. Hilton Worldwide Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. Marriott International pays out 45.5% of its earnings in the form of a dividend. Hilton Worldwide Holdings pays out 461.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marriott International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and target prices for Marriott International and Hilton Worldwide Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marriott International 1 7 8 0 2.44
Hilton Worldwide Holdings 1 5 10 0 2.56

Marriott International presently has a consensus target price of $97.27, suggesting a potential downside of 3.02%. Hilton Worldwide Holdings has a consensus target price of $71.43, suggesting a potential upside of 14.40%. Given Hilton Worldwide Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Hilton Worldwide Holdings is more favorable than Marriott International.

Earnings and Valuation

This table compares Marriott International and Hilton Worldwide Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Marriott International $4.57 billion 8.17 $2.54 billion $2.90 34.59
Hilton Worldwide Holdings $7.39 billion 2.74 $2.78 billion $0.13 480.09

Hilton Worldwide Holdings has higher revenue and earnings than Marriott International. Marriott International is trading at a lower price-to-earnings ratio than Hilton Worldwide Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Marriott International and Hilton Worldwide Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marriott International 5.27% 26.26% 5.76%
Hilton Worldwide Holdings 0.39% 19.65% 3.76%

Summary

Marriott International beats Hilton Worldwide Holdings on 10 of the 16 factors compared between the two stocks.

About Marriott International

Marriott International, Inc. (Marriott International) is a lodging company. Marriott International operates in three business segments: North American Full-Service, North American Limited-Service and International. Its North American Full-Service segment includes its Luxury and Premium brands (JW Marriott, Marriott Hotels, Sheraton, Westin, Renaissance Hotels, Le Meridien, Autograph Collection Hotels, Delta Hotels, Gaylord Hotels, and Tribute Portfolio) located in the United States and Canada. Its North American Limited-Service segment includes Select brands (Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, Element Hotels and Moxy Hotels) located in the United States and Canada. Its International segment includes JW Marriott, St. Regis, EDITION, Bulgari Hotels & Resorts, Marriott Hotels, Sheraton, Westin, Four Points, Aloft Hotels, AC Hotels by Marriott, Protea Hotels, Element Hotels, and Moxy Hotels located outside the United States and Canada.

About Hilton Worldwide Holdings

Hilton Worldwide Holdings Inc. is a hospitality company. The Company is engaged in owning, leasing, managing and franchising hotels and resorts. The Company’s segments include ownership, and management and franchise. Its global portfolio of owned and leased properties includes a range of hotels in gateway cities, such as New York City, London, San Francisco, Chicago, Sao Paolo and Tokyo. The Company’s management and franchise segment manages hotels and licenses its brands to franchisees. Its brand portfolio includes Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio-A Collection by Hilton, DoubleTree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton. As of December 31, 2016, the Company owned, leased, managed or franchised 4,875 hotel and resort properties, totaling 796,440 rooms in 104 countries and territories.

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