Critical Comparison: Red Lion Hotels (RLH) versus InterContinental Hotels Group (IHG)
Red Lion Hotels (NYSE: IHG) and InterContinental Hotels Group (NYSE:IHG) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.
Earnings and Valuation
This table compares Red Lion Hotels and InterContinental Hotels Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Red Lion Hotels||$171.93 million||1.94||$580,000.00||N/A||N/A|
|InterContinental Hotels Group||$1.78 billion||6.48||$592.00 million||$2.43||24.94|
This is a summary of recent ratings and recommmendations for Red Lion Hotels and InterContinental Hotels Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Red Lion Hotels||0||0||1||0||3.00|
|InterContinental Hotels Group||0||4||2||0||2.33|
Red Lion Hotels currently has a consensus target price of $16.25, suggesting a potential upside of 17.75%. InterContinental Hotels Group has a consensus target price of $64.19, suggesting a potential upside of 5.91%. Given Red Lion Hotels’ stronger consensus rating and higher probable upside, research analysts clearly believe Red Lion Hotels is more favorable than InterContinental Hotels Group.
InterContinental Hotels Group pays an annual dividend of $1.02 per share and has a dividend yield of 1.7%. Red Lion Hotels does not pay a dividend. InterContinental Hotels Group pays out 42.0% of its earnings in the form of a dividend. InterContinental Hotels Group has raised its dividend for 5 consecutive years.
This table compares Red Lion Hotels and InterContinental Hotels Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Red Lion Hotels||2.80%||-1.97%||-1.17%|
|InterContinental Hotels Group||N/A||N/A||N/A|
Insider and Institutional Ownership
66.4% of Red Lion Hotels shares are owned by institutional investors. Comparatively, 6.4% of InterContinental Hotels Group shares are owned by institutional investors. 19.7% of Red Lion Hotels shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Red Lion Hotels has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, InterContinental Hotels Group has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.
InterContinental Hotels Group beats Red Lion Hotels on 9 of the 15 factors compared between the two stocks.
About Red Lion Hotels
Red Lion Hotels Corporation, doing business as RLH Corporation, operates as a hospitality and leisure company the United States. It operates in two segments, Company Operated Hotels and Franchised Hotels. The company owns, manages, and franchises upscale, midscale, and economy hotels under the Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, GuestHouse, Settle Inn, Americas Best Value Inn, Canadas Best Value Inn, Signature and Signature Inn, and Country Hearth Inns & Suites brands; America's Best Inn & Suites, Jameson Inns, Lexington Hotels & Inns, and 3 Palm Hotels brands; and Value Inn Worldwide and Value Hotel Worldwide brands. As of December 31, 2017, it had a network of 1,061 franchised hotels, including a total of 65,200 rooms. The company was formerly known as WestCoast Hospitality Corporation and changed its name to Red Lion Hotels Corporation in September 2005. Red Lion Hotels Corporation was founded in 1937 and is headquartered in Denver, Colorado.
About InterContinental Hotels Group
InterContinental Hotels Group PLC owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China. The company operates hotels, resorts, and restaurants under the InterContinental, Kimpton, Hotel Indigo, EVEN, HUALUXE, Crowne Plaza, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, Holiday Inn Resort, avid, Staybridge Suites, and Candlewood Suites brands. It also provides IHG Rewards Club, a hotel loyalty program. As of December 31, 2017, the company had 5,348 hotels with 798,075 rooms. InterContinental Hotels Group PLC was founded in 1967 and is headquartered in Denham, the United Kingdom.
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