Marriott International (NYSE: RLH) and Red Lion Hotels (NYSE:RLH) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Institutional and Insider Ownership

63.9% of Marriott International shares are held by institutional investors. Comparatively, 66.4% of Red Lion Hotels shares are held by institutional investors. 13.0% of Marriott International shares are held by company insiders. Comparatively, 19.7% of Red Lion Hotels shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Marriott International and Red Lion Hotels’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marriott International 7.31% 52.81% 8.02%
Red Lion Hotels 2.80% -1.97% -1.17%

Dividends

Marriott International pays an annual dividend of $1.64 per share and has a dividend yield of 1.4%. Red Lion Hotels does not pay a dividend. Marriott International pays out 37.6% of its earnings in the form of a dividend. Marriott International has raised its dividend for 7 consecutive years.

Risk & Volatility

Marriott International has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, Red Lion Hotels has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Valuation & Earnings

This table compares Marriott International and Red Lion Hotels’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marriott International $22.89 billion 1.83 $1.37 billion $4.36 27.63
Red Lion Hotels $171.93 million 1.94 $580,000.00 N/A N/A

Marriott International has higher revenue and earnings than Red Lion Hotels.

Analyst Recommendations

This is a summary of current ratings and target prices for Marriott International and Red Lion Hotels, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marriott International 0 9 5 0 2.36
Red Lion Hotels 0 0 1 0 3.00

Marriott International currently has a consensus target price of $138.17, suggesting a potential upside of 14.70%. Red Lion Hotels has a consensus target price of $16.25, suggesting a potential upside of 17.75%. Given Red Lion Hotels’ stronger consensus rating and higher probable upside, analysts plainly believe Red Lion Hotels is more favorable than Marriott International.

Summary

Marriott International beats Red Lion Hotels on 9 of the 15 factors compared between the two stocks.

Marriott International Company Profile

Marriott International, Inc. operates, franchises, and licenses hotel, residential, and timeshare properties worldwide. The company operates through three segments: North American Full-Service, North American Limited-Service, and Asia Pacific. It operates its properties under the JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, EDITION, Bulgari, Marriott Hotels, Sheraton, Westin, Renaissance, Le Méridien, Autograph Collection, Delta Hotels, Gaylord Hotels, Marriott Executive Apartments, Marriott Vacation Club, Tribute Portfolio, Design Hotels, Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, Four Points, TownePlace Suites, Aloft, AC Hotels by Marriott, Protea Hotels, Element, and Moxy brand names. As of June 7, 2018, it operated, franchised, and licensed approximately 6,500 properties in 127 countries and territories. Marriott International, Inc. was founded in 1927 and is headquartered in Bethesda, Maryland.

Red Lion Hotels Company Profile

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.

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