Comparing La Quinta Holdings (LQ) & Choice Hotels International (CHH)
Choice Hotels International (NYSE: CHH) and La Quinta Holdings (NYSE:LQ) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitabiliy, dividends, analyst recommendations, institutional ownership, earnings and risk.
Valuation & Earnings
This table compares Choice Hotels International and La Quinta Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Choice Hotels International||$915.42 million||3.88||$272.73 million||$2.59||24.46|
|La Quinta Holdings||$973.13 million||1.77||$308.98 million||$0.34||43.12|
La Quinta Holdings has higher revenue and earnings than Choice Hotels International. Choice Hotels International is trading at a lower price-to-earnings ratio than La Quinta Holdings, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Choice Hotels International and La Quinta Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Choice Hotels International||1||3||2||0||2.17|
|La Quinta Holdings||1||5||3||0||2.22|
Choice Hotels International currently has a consensus target price of $58.75, indicating a potential downside of 7.26%. La Quinta Holdings has a consensus target price of $13.21, indicating a potential downside of 9.91%. Given Choice Hotels International’s higher probable upside, analysts clearly believe Choice Hotels International is more favorable than La Quinta Holdings.
Insider & Institutional Ownership
49.8% of Choice Hotels International shares are owned by institutional investors. Comparatively, 98.7% of La Quinta Holdings shares are owned by institutional investors. 22.0% of Choice Hotels International shares are owned by company insiders. Comparatively, 1.6% of La Quinta Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Choice Hotels International and La Quinta Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Choice Hotels International||16.05%||-45.12%||17.22%|
|La Quinta Holdings||3.91%||8.04%||1.81%|
Choice Hotels International pays an annual dividend of $0.86 per share and has a dividend yield of 1.4%. La Quinta Holdings does not pay a dividend. Choice Hotels International pays out 33.2% of its earnings in the form of a dividend. La Quinta Holdings has raised its dividend for 3 consecutive years.
Volatility & Risk
Choice Hotels International has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, La Quinta Holdings has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.
La Quinta Holdings beats Choice Hotels International on 10 of the 17 factors compared between the two stocks.
Choice Hotels International Company Profile
Choice Hotels International, Inc. is a hotel franchisor. The Company’s segments include Hotel Franchising, SkyTouch Technology and Corporate & Other. It franchises lodging properties under brand names, including Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. The Company had 6,514 hotels open and 775 hotels under construction, awaiting conversion or approved for development, as of December 31, 2016, representing 516,122 rooms open and 62,547 rooms under construction, awaiting conversion or approved for development in 50 states, the District of Columbia and over 40 countries and territories outside the United States. Its domestic franchising operations are conducted through direct franchising relationships, while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships.
La Quinta Holdings Company Profile
La Quinta Holdings Inc. is an owner, operator and franchisor of select-service hotels primarily serving the midscale and upper-midscale sectors under the La Quinta brand. The Company’s segments include owned hotels, franchise and management, and corporate and other. The owned hotels segment is engaged in the operation of owned hotel properties. The franchise and management segment is engaged in various license, franchise and management agreements relating to its owned and franchised hotels. As of December 31, 2016, its portfolio consisted of 888 hotels representing approximately 87,200 rooms located primarily across 48 states in the United States, as well as in Canada, Mexico, Honduras and Colombia, of which 322 hotels were owned and operated, and 566 were franchised. As of December 31, 2016, the Company had a pipeline of 248 franchised hotels in the United States, Mexico, Colombia, Nicaragua, Guatemala, Chile and El Salvador.
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