Marcus Corporation (The) (NYSE: MCS) and La Quinta Holdings (NYSE:LQ) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitabiliy.

Earnings and Valuation

This table compares Marcus Corporation (The) and La Quinta Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Marcus Corporation (The) $576.37 million 0.94 $122.89 million $1.49 19.16
La Quinta Holdings $973.13 million 1.76 $308.98 million $0.34 42.97

La Quinta Holdings has higher revenue and earnings than Marcus Corporation (The). Marcus Corporation (The) 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.

Profitability

This table compares Marcus Corporation (The) and La Quinta Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marcus Corporation (The) 7.27% 10.83% 4.83%
La Quinta Holdings 3.91% 8.04% 1.81%

Risk and Volatility

Marcus Corporation (The) has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, La Quinta Holdings has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Marcus Corporation (The) and La Quinta Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marcus Corporation (The) 0 0 3 0 3.00
La Quinta Holdings 1 5 3 0 2.22

Marcus Corporation (The) presently has a consensus target price of $39.90, indicating a potential upside of 39.75%. La Quinta Holdings has a consensus target price of $13.21, indicating a potential downside of 9.60%. Given Marcus Corporation (The)’s stronger consensus rating and higher probable upside, research analysts clearly believe Marcus Corporation (The) is more favorable than La Quinta Holdings.

Insider and Institutional Ownership

58.0% of Marcus Corporation (The) shares are owned by institutional investors. Comparatively, 99.2% of La Quinta Holdings shares are owned by institutional investors. 33.5% of Marcus Corporation (The) shares are owned by insiders. Comparatively, 1.3% of La Quinta Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Marcus Corporation (The) pays an annual dividend of $0.50 per share and has a dividend yield of 1.8%. La Quinta Holdings does not pay a dividend. Marcus Corporation (The) pays out 33.6% of its earnings in the form of a dividend. Marcus Corporation (The) has increased its dividend for 5 consecutive years.

Summary

Marcus Corporation (The) beats La Quinta Holdings on 9 of the 16 factors compared between the two stocks.

About Marcus Corporation (The)

The Marcus Corporation operates principally in two business segments: Theatres, and Hotels and Resorts. The Theatres segment operates multiscreen motion picture theatres in Wisconsin, Illinois, Ohio, Minnesota, Iowa, North Dakota and Nebraska, and a family entertainment center in Wisconsin. The Hotels and Resorts segment owns and operates hotels and resorts in Wisconsin, Illinois, Oklahoma and Nebraska, and manages hotels, resorts and other properties in Wisconsin, Minnesota, Texas, Nevada, Georgia, Florida and California. As of December 31, 2015, the Company owned or operated 53 movie theatre locations with a total of 668 screens in Wisconsin, Illinois, Iowa, Minnesota, Nebraska, North Dakota and Ohio. Its owned and operated hotels and resorts include The Pfister Hotel, The Hilton Milwaukee City Center, Hilton Madison at Monona Terrace, The Grand Geneva Resort & Spa, InterContinental Milwaukee, Skirvin Hilton, AC Hotel Chicago Downtown and The Lincoln Marriott Cornhusker Hotel.

About La Quinta Holdings

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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