Financial Analysis: Starwood Hotels & Resorts Worldwide (HOT) & Intercontinental Hotels Group (IHG)
Starwood Hotels & Resorts Worldwide (NYSE: HOT) and Intercontinental Hotels Group (NYSE:IHG) 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 dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitabiliy.
Institutional & Insider Ownership
83.5% of Starwood Hotels & Resorts Worldwide shares are owned by institutional investors. Comparatively, 6.9% of Intercontinental Hotels Group shares are owned by institutional investors. 0.7% of Starwood Hotels & Resorts Worldwide shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Starwood Hotels & Resorts Worldwide pays an annual dividend of $1.50 per share and has a dividend yield of 1.9%. Intercontinental Hotels Group pays an annual dividend of $0.96 per share and has a dividend yield of 1.7%. 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 4 consecutive years and Intercontinental Hotels Group has increased its dividend for 7 consecutive years.
This is a breakdown of current ratings and recommmendations for Starwood Hotels & Resorts Worldwide and Intercontinental Hotels Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Hotels & Resorts Worldwide||0||0||0||0||N/A|
|Intercontinental Hotels Group||2||4||2||0||2.00|
Intercontinental Hotels Group has a consensus target price of $44.00, indicating a potential downside of 22.86%. Given Intercontinental Hotels Group’s higher probable upside, analysts clearly believe Intercontinental Hotels Group is more favorable than Starwood Hotels & Resorts Worldwide.
Valuation and Earnings
This table compares Starwood Hotels & Resorts Worldwide 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|
|Starwood Hotels & Resorts Worldwide||N/A||N/A||N/A||$0.48||160.52|
|Intercontinental Hotels Group||$1.72 billion||6.30||$757.00 million||N/A||N/A|
Intercontinental Hotels Group has higher revenue and earnings than Starwood Hotels & Resorts Worldwide.
Volatility & Risk
Starwood Hotels & Resorts Worldwide has a beta of 1.99, meaning that its stock price is 99% more volatile than the S&P 500. Comparatively, Intercontinental Hotels Group has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.
This table compares Starwood Hotels & Resorts Worldwide and Intercontinental Hotels Group’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%|
|Intercontinental Hotels Group||N/A||N/A||N/A|
Intercontinental Hotels Group beats Starwood Hotels & Resorts Worldwide on 8 of the 12 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.
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.
Receive News & Ratings for Starwood Hotels & Resorts Worldwide Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Starwood Hotels & Resorts Worldwide Inc and related companies with MarketBeat.com's FREE daily email newsletter.