Hyatt Hotels Corporation (NYSE: H) and China Lodging Group, Limited (NASDAQ:HTHT) are both mid-cap 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Hyatt Hotels Corporation and China Lodging Group, Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hyatt Hotels Corporation 0 10 2 0 2.17
China Lodging Group, Limited 0 1 5 0 2.83

Hyatt Hotels Corporation currently has a consensus target price of $56.86, suggesting a potential upside of 1.60%. China Lodging Group, Limited has a consensus target price of $69.60, suggesting a potential downside of 36.37%. Given Hyatt Hotels Corporation’s higher probable upside, equities analysts plainly believe Hyatt Hotels Corporation is more favorable than China Lodging Group, Limited.

Earnings & Valuation

This table compares Hyatt Hotels Corporation and China Lodging Group, Limited’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hyatt Hotels Corporation $2.72 billion 0.80 $671.00 million $2.00 27.98
China Lodging Group, Limited $996.83 million 7.58 $265.64 million $1.84 59.45

Hyatt Hotels Corporation has higher revenue and earnings than China Lodging Group, Limited. Hyatt Hotels Corporation is trading at a lower price-to-earnings ratio than China Lodging Group, Limited, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hyatt Hotels Corporation and China Lodging Group, Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hyatt Hotels Corporation 5.71% 6.78% 3.36%
China Lodging Group, Limited 13.29% 16.80% 9.09%

Volatility and Risk

Hyatt Hotels Corporation has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, China Lodging Group, Limited has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500.

Institutional and Insider Ownership

31.0% of Hyatt Hotels Corporation shares are owned by institutional investors. Comparatively, 45.6% of China Lodging Group, Limited shares are owned by institutional investors. 25.5% of Hyatt Hotels Corporation shares are owned by insiders. Comparatively, 49.4% of China Lodging Group, Limited 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.

Summary

China Lodging Group, Limited beats Hyatt Hotels Corporation on 10 of the 14 factors compared between the two stocks.

About Hyatt Hotels Corporation

Hyatt Hotels Corporation is a global hospitality company. The Company develops, owns, operates, manages, franchises, licenses or provides services to a portfolio of properties. The Company operates through four segments: owned and leased hotels; Americas management and franchising (Americas); ASPAC management and franchising (ASPAC), and EAME/SW Asia management and franchising (EAME/SW Asia). The owned and leased hotels segment consists of its owned and leased full service and select service hotels. The Americas segment consists of its management and franchising of properties located in the United States, Latin America, Canada and the Caribbean. The ASPAC segment consists of its management and franchising of properties located in Southeast Asia, as well as China, Australia, South Korea, Japan and Micronesia. The EAME/SW Asia segment consists of its management and franchising of properties located in Europe, Africa, the Middle East, India, Central Asia and Nepal.

About China Lodging Group, Limited

China Lodging Group, Limited is a holding company. The Company is a multi-brand hotel group in China with leased, manachised and franchised models. Under the lease model, the Company directly operates hotels located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers the Company appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees. The Company has approximately 620 leased hotels; over 2,070 manachised hotels and approximately 80 franchised hotels in operation and over 20 leased hotels and approximately 660 manachised and franchised hotels under development. The Company offers approximately seven hotel brands that focus on various segments of customers: Joya Hotel, Manxin Hotels & Resorts, JI Hotel, Starway Hotel, Elan Hotel, HanTing Hotel and Hi Inn.

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