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

Valuation & Earnings

This table compares Starwood Hotels & Resorts Worldwide and Marriot Vacations Worldwide Corporation’s revenue, earnings per share (EPS) 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
Marriot Vacations Worldwide Corporation $1.30 billion 2.35 $255.26 million $5.56 20.26

Marriot Vacations Worldwide Corporation has higher revenue and earnings than Starwood Hotels & Resorts Worldwide. Marriot Vacations Worldwide Corporation is trading at a lower price-to-earnings ratio than Starwood Hotels & Resorts Worldwide, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

83.5% of Starwood Hotels & Resorts Worldwide shares are held by institutional investors. Comparatively, 78.9% of Marriot Vacations Worldwide Corporation shares are held by institutional investors. 0.7% of Starwood Hotels & Resorts Worldwide shares are held by company insiders. Comparatively, 3.3% of Marriot Vacations Worldwide Corporation shares are held by company 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.

Dividends

Starwood Hotels & Resorts Worldwide pays an annual dividend of $1.50 per share and has a dividend yield of 1.9%. Marriot Vacations Worldwide Corporation pays an annual dividend of $1.40 per share and has a dividend yield of 1.2%. 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. Marriot Vacations Worldwide Corporation pays out 25.2% of its earnings in the form of a dividend. Starwood Hotels & Resorts Worldwide has raised its dividend for 7 consecutive years and Marriot Vacations Worldwide Corporation has raised its dividend for 2 consecutive years. Starwood Hotels & Resorts Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Starwood Hotels & Resorts Worldwide and Marriot Vacations Worldwide Corporation’s 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%
Marriot Vacations Worldwide Corporation 7.90% 16.96% 6.53%

Analyst Recommendations

This is a summary of current recommendations and price targets for Starwood Hotels & Resorts Worldwide and Marriot Vacations Worldwide Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starwood Hotels & Resorts Worldwide 0 0 0 0 N/A
Marriot Vacations Worldwide Corporation 0 2 5 0 2.71

Marriot Vacations Worldwide Corporation has a consensus price target of $114.29, indicating a potential upside of 1.48%. Given Marriot Vacations Worldwide Corporation’s higher probable upside, analysts clearly believe Marriot Vacations Worldwide Corporation is more favorable than Starwood Hotels & Resorts Worldwide.

Risk and Volatility

Starwood Hotels & Resorts Worldwide has a beta of 1.99, indicating that its share price is 99% more volatile than the S&P 500. Comparatively, Marriot Vacations Worldwide Corporation has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Summary

Marriot Vacations Worldwide Corporation beats Starwood Hotels & Resorts Worldwide on 9 of the 13 factors compared between the two stocks.

Starwood Hotels & Resorts Worldwide Company Profile

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.

Marriot Vacations Worldwide Corporation Company Profile

Marriott Vacations Worldwide Corporation focuses on vacation ownership, based on number of owners, number of resorts and revenues. The Company is an exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Company operates through three segments North America, Europe and Asia Pacific. In the North America segment, it develops, markets, sells and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. Its Europe segment is engaged in selling its existing projects and managing existing resorts. Its Asia Pacific segment, it develops, markets, sells and manages two points-based programs that it designed to appeal to the vacation preferences of the market, Marriott Vacation Club, Asia Pacific and Marriott Vacation Club Destinations, Australia, as well as a weeks-based right-to-use product.

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