Hyatt Hotels Corporation (NYSE: H) and Starwood Hotels & Resorts Worldwide (NYSE:HOT) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Profitability

This table compares Hyatt Hotels Corporation and Starwood Hotels & Resorts Worldwide’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%
Starwood Hotels & Resorts Worldwide -2.81% -18.50% -1.83%

Risk & Volatility

Hyatt Hotels Corporation has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Starwood Hotels & Resorts Worldwide has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500.

Insider & Institutional Ownership

31.0% of Hyatt Hotels Corporation shares are owned by institutional investors. Comparatively, 83.5% of Starwood Hotels & Resorts Worldwide shares are owned by institutional investors. 25.5% of Hyatt Hotels Corporation shares are owned by company insiders. Comparatively, 0.7% of Starwood Hotels & Resorts Worldwide shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Hyatt Hotels Corporation and Starwood Hotels & Resorts Worldwide, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hyatt Hotels Corporation 0 10 2 0 2.17
Starwood Hotels & Resorts Worldwide 0 0 0 0 N/A

Hyatt Hotels Corporation currently has a consensus price target of $56.86, suggesting a potential downside of 0.62%. Given Hyatt Hotels Corporation’s higher probable upside, research analysts plainly believe Hyatt Hotels Corporation is more favorable than Starwood Hotels & Resorts Worldwide.

Earnings & Valuation

This table compares Hyatt Hotels Corporation and Starwood Hotels & Resorts Worldwide’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 0.82 $671.00 million $2.00 28.61
Starwood Hotels & Resorts Worldwide N/A N/A N/A $0.48 160.52

Hyatt Hotels Corporation has higher revenue and earnings than Starwood Hotels & Resorts Worldwide. Hyatt Hotels Corporation is trading at a lower price-to-earnings ratio than Starwood Hotels & Resorts Worldwide, indicating that it is currently the more affordable of the two stocks.

Dividends

Starwood Hotels & Resorts Worldwide pays an annual dividend of $1.50 per share and has a dividend yield of 1.9%. Hyatt Hotels Corporation does not pay a dividend. Starwood Hotels & Resorts Worldwide pays out 312.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Hotels & Resorts Worldwide has raised its dividend for 7 consecutive years.

Summary

Hyatt Hotels Corporation beats Starwood Hotels & Resorts Worldwide on 9 of the 13 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 Starwood Hotels & Resorts Worldwide

Starwood Hotels & Resorts Worldwide, LLC, formerly Starwood Hotels & Resorts Worldwide, Inc., is a hotel and leisure company. The Company’s hotel business is focused on the global operation of hotels and resorts primarily in the luxury and upper upscale segments of the lodging industry. The Company manages and operates its hotel business in three hotel segments: the Americas; Europe, Africa and the Middle East (EAME), and Asia Pacific. Its vacation ownership and residential business is a separate segment. The Company conducts its hotel and leisure business both directly and through its subsidiaries. It owns Starwood Vacation Ownership, Inc., a provider of vacation experiences through villa-style resorts and access to Starwood brands. The Starwood Preferred Guest program is its traveler, customer loyalty and multi-brand marketing program. The Company also develops, owns and operates vacation ownership resorts, and markets and sells the vacation ownership Interests in the resorts.

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