Morgans Hotel Group (NASDAQ: MHGC) and Belmond (NYSE:BEL) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitabiliy.

Risk & Volatility

Morgans Hotel Group has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Belmond has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Insider and Institutional Ownership

33.2% of Morgans Hotel Group shares are owned by institutional investors. Comparatively, 75.5% of Belmond shares are owned by institutional investors. 1.8% of Morgans Hotel Group shares are owned by company insiders. Comparatively, 87.6% of Belmond shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Morgans Hotel Group and Belmond’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morgans Hotel Group -17.23% N/A -6.56%
Belmond 3.61% 1.74% 0.77%

Earnings & Valuation

This table compares Morgans Hotel Group and Belmond’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Morgans Hotel Group N/A N/A N/A $0.23 9.35
Belmond $547.78 million 2.46 $102.94 million $0.20 66.00

Belmond has higher revenue and earnings than Morgans Hotel Group. Morgans Hotel Group is trading at a lower price-to-earnings ratio than Belmond, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Morgans Hotel Group and Belmond, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morgans Hotel Group 0 0 0 0 N/A
Belmond 0 3 2 0 2.40

Belmond has a consensus price target of $14.50, suggesting a potential upside of 9.85%. Given Belmond’s higher probable upside, analysts plainly believe Belmond is more favorable than Morgans Hotel Group.

Summary

Belmond beats Morgans Hotel Group on 8 of the 10 factors compared between the two stocks.

About Morgans Hotel Group

Morgans Hotel Group Co. is a lifestyle hospitality company. The Company operates, owns, licenses and develops boutique hotels, primarily in gateway cities and select resort markets in the United States, Europe and other international locations. Its portfolio of Morgans Hotel Group branded hotel properties and food and beverage operations and entities consists of its over three owned hotels, including Hudson in New York, Delano South Beach in Miami Beach and Clift in San Francisco; its owned food and beverage operations consisting of leasehold interests in the food and beverage operations located at Sanderson, in London; its unconsolidated Joint Venture Hotel, including Mondrian South Beach in Miami Beach; its over seven Managed Hotels consisting of Royalton and Morgans in New York, Shore Club in Miami Beach, Mondrian in Los Angeles, and Sanderson, St Martins Lane and Mondrian London in London, and its licensed hotel, Delano Las Vegas, and its franchised hotel, 10 Karakoy, in Istanbul.

About Belmond

Belmond Ltd. (Belmond) is a hotel company and adventure travel operator. As of December 31, 2016, Belmond owned, partially-owned and/or operated 45 properties, consisting of 34 individual deluxe hotels, 29 of which are owned (including nine under long-term lease), five European tourist trains, two cruise ships in Myanmar (one of which is under long-term charter), one French canal cruise business consisting of five small canal boats, and one stand-alone restaurant in the United States. It operates through six segments: owned hotels in Europe, owned hotels in North America (including one stand-alone restaurant), owned hotels in Rest of world, owned trains and cruises, part-owned/managed hotels and part-owned/managed trains. As of December 31, 2016, Belmond’s around the world portfolio of hotels in operation consisted of 3,272 individual guest rooms and multiple-room suites (keys).

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