MGM Resorts International (NYSE:MGM) and Marriott International (NASDAQ:MAR) are both large-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.
Risk & Volatility
MGM Resorts International has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Marriott International has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
This table compares MGM Resorts International and Marriott International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MGM Resorts International||2.26%||4.03%||1.45%|
Valuation & Earnings
This table compares MGM Resorts International and Marriott International’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MGM Resorts International||$11.76 billion||1.17||$445.45 million||$0.99||25.89|
|Marriott International||$20.76 billion||2.14||$1.91 billion||$6.21||21.21|
Marriott International has higher revenue and earnings than MGM Resorts International. Marriott International is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
80.1% of MGM Resorts International shares are owned by institutional investors. Comparatively, 67.4% of Marriott International shares are owned by institutional investors. 3.5% of MGM Resorts International shares are owned by company insiders. Comparatively, 12.6% of Marriott International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
MGM Resorts International pays an annual dividend of $0.52 per share and has a dividend yield of 2.0%. Marriott International pays an annual dividend of $1.64 per share and has a dividend yield of 1.2%. MGM Resorts International pays out 52.5% of its earnings in the form of a dividend. Marriott International pays out 26.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Marriott International has raised its dividend for 8 consecutive years.
This is a breakdown of recent ratings for MGM Resorts International and Marriott International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MGM Resorts International||0||6||5||0||2.45|
MGM Resorts International currently has a consensus price target of $33.78, suggesting a potential upside of 31.79%. Marriott International has a consensus price target of $135.31, suggesting a potential upside of 2.73%. Given MGM Resorts International’s stronger consensus rating and higher probable upside, research analysts plainly believe MGM Resorts International is more favorable than Marriott International.
Marriott International beats MGM Resorts International on 11 of the 17 factors compared between the two stocks.
MGM Resorts International Company Profile
MGM Resorts International, through its subsidiaries, owns and operates integrated casino, hotel, and entertainment resorts in the United States and Macau. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots, table games, and race and sports book wagering. As of February 27, 2019, its portfolio consisted of 29 hotel and destination gaming offerings. The company also owns and operates Shadow Creek golf course, Primm Valley Golf Club, and Fallen Oak golf course. Its customers include premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.
Marriott International Company Profile
Marriott International, Inc. operates, franchises, and licenses hotel, residential, and timeshare properties worldwide. The company operates through North American Full-Service, North American Limited-Service, and Asia Pacific segments. It operates its properties under the JW Marriott, The Ritz-Carlton, Ritz-Carlton Reserve, W Hotels, The Luxury Collection, St. Regis, EDITION, Bulgari, Marriott Hotels, Sheraton, Delta Hotels, Marriott Executive Apartments, Marriott Vacation Club, Westin, Renaissance, Le Méridien, Autograph Collection, Gaylord Hotels, Tribute Portfolio, Design Hotels, Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, Four Points, TownePlace Suites, Aloft, AC Hotels by Marriott, Protea Hotels, Element, and Moxy brand names. As of April 10, 2019, it operated approximately 7,000 properties under 30 hotel brands in 130 countries and territories. Marriott International, Inc. was founded in 1927 and is headquartered in Bethesda, Maryland.
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