MGM Growth Properties (NYSE: MGP) and Host Hotels & Resorts (NYSE:HST) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Insider and Institutional Ownership

93.5% of MGM Growth Properties shares are held by institutional investors. 0.6% of MGM Growth Properties shares are held by insiders. Comparatively, 1.7% of Host Hotels & Resorts shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares MGM Growth Properties and Host Hotels & Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MGM Growth Properties 6.18% 0.81% 0.48%
Host Hotels & Resorts 11.11% 8.44% 5.11%

Valuation & Earnings

This table compares MGM Growth Properties and Host Hotels & Resorts’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
MGM Growth Properties $467.55 million 4.49 $29.93 million $0.77 38.47
Host Hotels & Resorts $5.43 billion 2.73 $762.00 million $0.81 24.73

Host Hotels & Resorts has higher revenue and earnings than MGM Growth Properties. Host Hotels & Resorts is trading at a lower price-to-earnings ratio than MGM Growth Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

MGM Growth Properties pays an annual dividend of $1.58 per share and has a dividend yield of 5.3%. Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. MGM Growth Properties pays out 205.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts pays out 98.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGM Growth Properties has raised its dividend for 6 consecutive years. MGM Growth Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

MGM Growth Properties has a beta of -1.42, suggesting that its share price is 242% less volatile than the S&P 500. Comparatively, Host Hotels & Resorts has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for MGM Growth Properties and Host Hotels & Resorts, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGM Growth Properties 0 2 5 0 2.71
Host Hotels & Resorts 1 8 6 0 2.33

MGM Growth Properties presently has a consensus price target of $31.14, suggesting a potential upside of 5.14%. Host Hotels & Resorts has a consensus price target of $19.50, suggesting a potential downside of 2.65%. Given MGM Growth Properties’ stronger consensus rating and higher possible upside, research analysts clearly believe MGM Growth Properties is more favorable than Host Hotels & Resorts.

Summary

Host Hotels & Resorts beats MGM Growth Properties on 10 of the 17 factors compared between the two stocks.

MGM Growth Properties Company Profile

MGM Growth Properties LLC is a real estate investment trust engaged in the acquisition, ownership and leasing of destination entertainment and leisure resorts, whose amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. Its portfolio consists of approximately 10 destination resorts. It has over six entertainment and gaming-related properties located on the Las Vegas Strip, including Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor and Excalibur, and The Park, a dining and entertainment complex located between New York-New York and Monte Carlo. Outside of Las Vegas, it owns over four casino resort properties, including MGM Grand Detroit in Detroit, Michigan, Borgata Hotel Casino & Spa in Atlantic City, New Jersey, and Beau Rivage and Gold Strike Tunica, both of which are located in Mississippi. It operates approximately 27,330 hotel rooms, over 200 restaurants, approximately 100 retail outlets and over 20 entertainment venues.

Host Hotels & Resorts Company Profile

Host Hotels & Resorts, Inc. (Host Inc.) operates as a self-managed and self-administered real estate investment trust (REIT). The Company operates through hotel ownership segment. The Company operates through hotel ownership segment. The Company owned properties and conducted operations through Host Hotels & Resorts, L.P. (Host L.P.), of which Host Inc. was the general partner and of which it held approximately 99% of the partnership interests (OP units), as of December 31, 2016. As of February 20, 2017, its lodging portfolio consisted of 96 primarily luxury and upper-upscale hotels containing approximately 53,500 rooms, with the majority located in the United States, and with seven of the properties located outside of the United States in Australia, Brazil, Canada and Mexico. In addition, it owns non-controlling interests in two international joint ventures: approximately a 33% interest in a joint venture in Europe, and a 9% indirect interest, through joint ventures in India.

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