Reviewing Hilton Worldwide Holdings (HLT) and Marriott International (MAR)

Hilton Worldwide Holdings (NYSE: HLT) and Marriott International (NASDAQ:MAR) are both large-cap consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitabiliy, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Hilton Worldwide Holdings and Marriott International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hilton Worldwide Holdings 1 5 10 0 2.56
Marriott International 1 7 8 0 2.44

Hilton Worldwide Holdings currently has a consensus target price of $71.43, indicating a potential upside of 17.10%. Marriott International has a consensus target price of $97.27, indicating a potential downside of 2.28%. Given Hilton Worldwide Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Hilton Worldwide Holdings is more favorable than Marriott International.

Dividends

Hilton Worldwide Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. Marriott International pays an annual dividend of $1.32 per share and has a dividend yield of 1.3%. Hilton Worldwide Holdings pays out 461.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marriott International pays out 45.5% of its earnings in the form of a dividend. Marriott International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Hilton Worldwide Holdings and Marriott International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hilton Worldwide Holdings $7.39 billion 2.68 $2.78 billion $0.13 469.01
Marriott International $4.57 billion 8.25 $2.52 billion $2.90 34.32

Hilton Worldwide Holdings has higher revenue and earnings than Marriott International. Marriott International is trading at a lower price-to-earnings ratio than Hilton Worldwide Holdings, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Hilton Worldwide Holdings has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Marriott International has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Profitability

This table compares Hilton Worldwide Holdings and Marriott International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hilton Worldwide Holdings 0.39% 19.65% 3.76%
Marriott International 5.27% 26.26% 5.76%

Institutional & Insider Ownership

67.1% of Marriott International shares are held by institutional investors. 1.5% of Hilton Worldwide Holdings shares are held by company insiders. Comparatively, 17.1% of Marriott International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Marriott International beats Hilton Worldwide Holdings on 10 of the 16 factors compared between the two stocks.

About Hilton Worldwide Holdings

Hilton Worldwide Holdings Inc. is a hospitality company. The Company is engaged in owning, leasing, managing and franchising hotels and resorts. The Company’s segments include ownership, and management and franchise. Its global portfolio of owned and leased properties includes a range of hotels in gateway cities, such as New York City, London, San Francisco, Chicago, Sao Paolo and Tokyo. The Company’s management and franchise segment manages hotels and licenses its brands to franchisees. Its brand portfolio includes Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio-A Collection by Hilton, DoubleTree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton. As of December 31, 2016, the Company owned, leased, managed or franchised 4,875 hotel and resort properties, totaling 796,440 rooms in 104 countries and territories.

About Marriott International

Marriott International, Inc. (Marriott International) is a lodging company. Marriott International operates in three business segments: North American Full-Service, North American Limited-Service and International. Its North American Full-Service segment includes its Luxury and Premium brands (JW Marriott, Marriott Hotels, Sheraton, Westin, Renaissance Hotels, Le Meridien, Autograph Collection Hotels, Delta Hotels, Gaylord Hotels, and Tribute Portfolio) located in the United States and Canada. Its North American Limited-Service segment includes Select brands (Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, Element Hotels and Moxy Hotels) located in the United States and Canada. Its International segment includes JW Marriott, St. Regis, EDITION, Bulgari Hotels & Resorts, Marriott Hotels, Sheraton, Westin, Four Points, Aloft Hotels, AC Hotels by Marriott, Protea Hotels, Element Hotels, and Moxy Hotels located outside the United States and Canada.

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