Huazhu Group (NASDAQ:HTHT) and GreenTree Hospitality Group (NYSE:GHG) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Analyst Ratings

This is a breakdown of recent recommendations for Huazhu Group and GreenTree Hospitality Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Huazhu Group 3 3 3 0 2.00
GreenTree Hospitality Group 0 1 2 0 2.67

Huazhu Group presently has a consensus target price of $42.00, indicating a potential upside of 20.41%. GreenTree Hospitality Group has a consensus target price of $16.53, indicating a potential upside of 23.75%. Given GreenTree Hospitality Group’s stronger consensus rating and higher possible upside, analysts clearly believe GreenTree Hospitality Group is more favorable than Huazhu Group.

Volatility & Risk

Huazhu Group has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500. Comparatively, GreenTree Hospitality Group has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Dividends

Huazhu Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. GreenTree Hospitality Group pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. Huazhu Group pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GreenTree Hospitality Group pays out 45.9% of its earnings in the form of a dividend. GreenTree Hospitality Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Huazhu Group and GreenTree Hospitality Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Huazhu Group 7.16% 15.82% 4.74%
GreenTree Hospitality Group 41.76% 25.30% 15.17%

Insider and Institutional Ownership

46.8% of Huazhu Group shares are held by institutional investors. Comparatively, 9.0% of GreenTree Hospitality Group shares are held by institutional investors. 49.4% of Huazhu Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Huazhu Group and GreenTree Hospitality Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Huazhu Group $1.46 billion 6.95 $104.00 million $0.36 96.89
GreenTree Hospitality Group $137.45 million 9.87 $57.32 million $0.61 21.90

Huazhu Group has higher revenue and earnings than GreenTree Hospitality Group. GreenTree Hospitality Group is trading at a lower price-to-earnings ratio than Huazhu Group, indicating that it is currently the more affordable of the two stocks.

Summary

GreenTree Hospitality Group beats Huazhu Group on 9 of the 16 factors compared between the two stocks.

About Huazhu Group

Huazhu Group Limited, together with its subsidiaries, develops and operates leased and owned, manachised, and franchised hotels primarily in the People's Republic of China. The company operates hotels under the Hi Inn, HanTing Hotel, Elan Hotel, Orange Hotel, HanTing Premium, Starway Hotel, JI Hotel, Orange Hotel Select, Manxin Hotel, Crystal Orange Hotel, Joya Hotel, Grand Mercure, Novotel, Mercure, Ibis Styles, and Ibis brand names for business and leisure travelers. As of September 30, 2018, it had 698 leased hotels, 3,139 manachised hotels, and 218 franchised hotels with 409,516 rooms. The company was formerly known as China Lodging Group, Limited and changed its name to Huazhu Group Limited in June 2018. Huazhu Group Limited was incorporated in 2007 and is headquartered in Shanghai, the People's Republic of China.

About GreenTree Hospitality Group

GreenTree Hospitality Group Ltd., through its subsidiaries, owns, operates, leases, franchises, and manages hotels in the People's Republic of China. The company operates hotels under the various brands, including GreenTree Eastern, as well as Gme, Gya, and VX; GreenTree Inns and GreenTree Alliance; and Vatica and Shell. As of March 31, 2018, it had 26 leased-and-operated hotels and 2,328 franchised-and-managed hotels with 195,552 hotel rooms in 266 cities. The company was founded in 2004 and is headquartered in Shanghai, the People's Republic of China. GreenTree Hospitality Group Ltd. is a subsidiary of GreenTree Inns Hotel Management Group, Inc.

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