Marriott International (NASDAQ: MAR) and Intercontinental Hotels Group (NYSE:IHG) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitabiliy, analyst recommendations and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for Marriott International and Intercontinental Hotels Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marriott International 1 6 8 0 2.47
Intercontinental Hotels Group 2 5 1 0 1.88

Marriott International presently has a consensus price target of $96.50, suggesting a potential downside of 4.45%. Intercontinental Hotels Group has a consensus price target of $44.00, suggesting a potential downside of 21.55%. Given Marriott International’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Marriott International is more favorable than Intercontinental Hotels Group.

Risk and Volatility

Marriott International has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Intercontinental Hotels Group has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.

Profitability

This table compares Marriott International and Intercontinental Hotels Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marriott International 4.91% 38.10% 6.17%
Intercontinental Hotels Group N/A N/A N/A

Dividends

Marriott International pays an annual dividend of $1.32 per share and has a dividend yield of 1.3%. Intercontinental Hotels Group pays an annual dividend of $0.96 per share and has a dividend yield of 1.7%. Marriott International pays out 47.5% of its earnings in the form of a dividend. Intercontinental Hotels Group has raised its dividend for 4 consecutive years. Intercontinental Hotels Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Marriott International and Intercontinental Hotels Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Marriott International $4.02 billion 9.52 $2.25 billion $2.78 36.33
Intercontinental Hotels Group $1.72 billion 6.20 $757.00 million N/A N/A

Marriott International has higher revenue and earnings than Intercontinental Hotels Group.

Institutional & Insider Ownership

67.0% of Marriott International shares are held by institutional investors. Comparatively, 6.8% of Intercontinental Hotels Group shares are held by institutional investors. 17.1% of Marriott International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Marriott International beats Intercontinental Hotels Group on 12 of the 15 factors compared between the two stocks.

Marriott International Company Profile

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.

Intercontinental Hotels Group Company Profile

InterContinental Hotels Group PLC is a hotel company. The Company franchises its brands to, and manages hotels on behalf of, third-party hotel owners. Its segments include The Americas; Europe; Asia, Middle East and Africa (AMEA); Greater China, and Central. It operates a portfolio of hotel brands, including InterContinental, HUALUXE, Kimpton, Crowne Plaza, Hotel Indigo, EVEN Hotels, Holiday Inn, Holiday Inn Express, Staybridge Suites Hotels, Holiday Inn Resort, Holiday Inn Club Vacations and Candlewood Suites Hotels. As of December 31, 2016, The Americas pipeline totaled 945 hotels (102,451 rooms). As of December 31, 2016, the Europe pipeline totaled 137 hotels (23,954 rooms). As of December 31, 2016, the AMEA pipeline totaled 149 hotels (39,643 rooms). As of December 31, 2016, the Greater China pipeline totaled 239 hotels (64,028 rooms). As of April 21, 2017, it had 5,200 hotels and 777,000 rooms in its system. As of April 21, 2017, it operated in over 100 countries globally.

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