Huazhu Group (NASDAQ:HTHT) and Wyndham Destinations (NYSE:WYND) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.
Volatility & Risk
Huazhu Group has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500. Comparatively, Wyndham Destinations has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500.
Huazhu Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Wyndham Destinations pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. Huazhu Group pays out 37.6% of its earnings in the form of a dividend. Wyndham Destinations pays out 21.4% 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. Wyndham Destinations is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Huazhu Group and Wyndham Destinations’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Huazhu Group||$1.61 billion||8.60||$254.00 million||$0.85||55.53|
|Wyndham Destinations||$4.04 billion||0.97||$507.00 million||$5.62||8.11|
Wyndham Destinations has higher revenue and earnings than Huazhu Group. Wyndham Destinations is trading at a lower price-to-earnings ratio than Huazhu Group, indicating that it is currently the more affordable of the two stocks.
This table compares Huazhu Group and Wyndham Destinations’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and price targets for Huazhu Group and Wyndham Destinations, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Huazhu Group currently has a consensus target price of $43.93, indicating a potential downside of 6.93%. Wyndham Destinations has a consensus target price of $44.26, indicating a potential downside of 2.87%. Given Wyndham Destinations’ stronger consensus rating and higher probable upside, analysts plainly believe Wyndham Destinations is more favorable than Huazhu Group.
Insider and Institutional Ownership
90.3% of Wyndham Destinations shares are owned by institutional investors. 49.4% of Huazhu Group shares are owned by insiders. Comparatively, 1.6% of Wyndham Destinations shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Wyndham Destinations beats Huazhu Group on 13 of the 16 factors compared between the two stocks.
Huazhu Group Company Profile
Huazhu Group Limited, together with its subsidiaries, develops leased and owned, manachised, and franchised hotels primarily in the People’s Republic of China. It operates hotels under its own brands, such as Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, and Blossom Hill Hotels & Resorts. The company also operates hotels under brand franchise agreements that include Ibis, Ibis Styles, Mercure, Novotel, and Grand Mercure. As of March 31, 2020, it operated 5,953 hotels with 575,488 rooms in 15 countries. 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 founded in 2005 and is headquartered in Shanghai, the People’s Republic of China.
Wyndham Destinations Company Profile
Wyndham Destinations, Inc. provides hospitality services and products in the United States and internationally. The company operates in two segments, Vacation Ownership and Vacation Exchange. The Vacation Ownership segment develops, markets, and sells vacation ownership interests (VOIs) to individual consumers; provides consumer financing in connection with the sale of VOIs; and provides property management services at resorts. The Vacation Exchange segment offers vacation exchange services and products to owners of VOIs. As of December 31, 2019, it had approximately 230 vacation ownership resorts. The company also offers private-label travel booking technology solutions. The company’s travel business Panorama includes vacation exchange, leisure travel, and technology brands, including RCI, vacation exchange that provides access to 4,200+ affiliated resorts worldwide; and Extra Holidays, offering condo vacations at hotel prices. The company was formerly known as Wyndham Worldwide Corporation and changed its name to Wyndham Destinations, Inc. in May 2018. Wyndham Destinations, Inc. was founded in 1990 and is headquartered in Orlando, Florida.
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