Intercontinental Hotels Group (NYSE: IHG) and Marriot Vacations Worldwide Corporation (NYSE:VAC) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitabiliy, risk, valuation, earnings, institutional ownership and dividends.

Volatility & Risk

Intercontinental Hotels Group has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Marriot Vacations Worldwide Corporation has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Profitability

This table compares Intercontinental Hotels Group and Marriot Vacations Worldwide Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Intercontinental Hotels Group N/A N/A N/A
Marriot Vacations Worldwide Corporation 7.90% 16.96% 6.53%

Institutional and Insider Ownership

6.9% of Intercontinental Hotels Group shares are owned by institutional investors. Comparatively, 78.9% of Marriot Vacations Worldwide Corporation shares are owned by institutional investors. 3.3% of Marriot Vacations Worldwide Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Intercontinental Hotels Group and Marriot Vacations Worldwide Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intercontinental Hotels Group 2 4 2 0 2.00
Marriot Vacations Worldwide Corporation 0 2 5 0 2.71

Intercontinental Hotels Group presently has a consensus price target of $44.00, suggesting a potential downside of 22.86%. Marriot Vacations Worldwide Corporation has a consensus price target of $114.29, suggesting a potential upside of 1.48%. Given Marriot Vacations Worldwide Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Marriot Vacations Worldwide Corporation is more favorable than Intercontinental Hotels Group.

Earnings and Valuation

This table compares Intercontinental Hotels Group and Marriot Vacations Worldwide Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Intercontinental Hotels Group $1.72 billion 6.30 $757.00 million N/A N/A
Marriot Vacations Worldwide Corporation $1.30 billion 2.35 $255.26 million $5.56 20.26

Intercontinental Hotels Group has higher revenue and earnings than Marriot Vacations Worldwide Corporation.

Dividends

Intercontinental Hotels Group pays an annual dividend of $0.96 per share and has a dividend yield of 1.7%. Marriot Vacations Worldwide Corporation pays an annual dividend of $1.40 per share and has a dividend yield of 1.2%. Marriot Vacations Worldwide Corporation pays out 25.2% of its earnings in the form of a dividend. Intercontinental Hotels Group has increased its dividend for 4 consecutive years and Marriot Vacations Worldwide Corporation has increased its dividend for 2 consecutive years. Intercontinental Hotels Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Marriot Vacations Worldwide Corporation beats Intercontinental Hotels Group on 8 of the 15 factors compared between the two stocks.

About Intercontinental Hotels Group

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.

About Marriot Vacations Worldwide Corporation

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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