Starwood Hotels & Resorts Worldwide (NYSE: HOT) and Hilton Grand Vacations (NYSE:HGV) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitabiliy and earnings.

Insider and Institutional Ownership

83.5% of Starwood Hotels & Resorts Worldwide shares are held by institutional investors. Comparatively, 95.6% of Hilton Grand Vacations shares are held by institutional investors. 0.7% of Starwood Hotels & Resorts Worldwide shares are held by company insiders. Comparatively, 0.5% of Hilton Grand Vacations shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Starwood Hotels & Resorts Worldwide and Hilton Grand Vacations’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Starwood Hotels & Resorts Worldwide N/A N/A N/A $0.48 160.52
Hilton Grand Vacations $1.48 billion 2.43 $376.00 million N/A N/A

Hilton Grand Vacations has higher revenue and earnings than Starwood Hotels & Resorts Worldwide.

Profitability

This table compares Starwood Hotels & Resorts Worldwide and Hilton Grand Vacations’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Starwood Hotels & Resorts Worldwide -2.81% -18.50% -1.83%
Hilton Grand Vacations N/A N/A N/A

Dividends

Starwood Hotels & Resorts Worldwide pays an annual dividend of $1.50 per share and has a dividend yield of 1.9%. Hilton Grand Vacations does not pay a dividend. Starwood Hotels & Resorts Worldwide pays out 312.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Hotels & Resorts Worldwide has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Starwood Hotels & Resorts Worldwide and Hilton Grand Vacations, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starwood Hotels & Resorts Worldwide 0 0 0 0 N/A
Hilton Grand Vacations 0 0 8 0 3.00

Hilton Grand Vacations has a consensus price target of $36.88, suggesting a potential upside of 1.44%. Given Hilton Grand Vacations’ higher possible upside, analysts clearly believe Hilton Grand Vacations is more favorable than Starwood Hotels & Resorts Worldwide.

Summary

Hilton Grand Vacations beats Starwood Hotels & Resorts Worldwide on 8 of the 11 factors compared between the two stocks.

About Starwood Hotels & Resorts Worldwide

Starwood Hotels & Resorts Worldwide, LLC, formerly Starwood Hotels & Resorts Worldwide, Inc., is a hotel and leisure company. The Company’s hotel business is focused on the global operation of hotels and resorts primarily in the luxury and upper upscale segments of the lodging industry. The Company manages and operates its hotel business in three hotel segments: the Americas; Europe, Africa and the Middle East (EAME), and Asia Pacific. Its vacation ownership and residential business is a separate segment. The Company conducts its hotel and leisure business both directly and through its subsidiaries. It owns Starwood Vacation Ownership, Inc., a provider of vacation experiences through villa-style resorts and access to Starwood brands. The Starwood Preferred Guest program is its traveler, customer loyalty and multi-brand marketing program. The Company also develops, owns and operates vacation ownership resorts, and markets and sells the vacation ownership Interests in the resorts.

About Hilton Grand Vacations

Hilton Grand Vacations Inc. is a timeshare company that markets and sells vacation ownership intervals (VOIs), manages resorts in leisure and urban destinations, and operates a points-based vacation club. The Company operates its business across two segments: Real Estate Sales and Financing, and Resort Operations and Club Management. As of September 30, 2016, the Company had 46 resorts, representing 7,592 units, and approximately 265,000 Hilton Grand Vacations Club (the Club) members. Club members can exchange their Club points for stays at any resort or any property in the Hilton system of various brands across over 4,700 properties, as well as various vacation options, such as cruises and guided tours. VOI product allows customers to purchase a lifetime of vacations. The Company offers amenities, such as full kitchens, in-unit washers and dryers, spas and kids’ clubs along with beach-front locations.

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