China Lodging Group, Limited (NASDAQ: HTHT) and Hyatt Hotels (NYSE:H) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Profitability

This table compares China Lodging Group, Limited and Hyatt Hotels’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Lodging Group, Limited 13.29% 16.80% 9.09%
Hyatt Hotels 7.28% 9.24% 4.46%

Risk and Volatility

China Lodging Group, Limited has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500. Comparatively, Hyatt Hotels has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Valuation and Earnings

This table compares China Lodging Group, Limited and Hyatt Hotels’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
China Lodging Group, Limited $996.83 million 6.94 $265.64 million $1.84 54.00
Hyatt Hotels $2.72 billion 0.81 $671.00 million $2.00 28.25

Hyatt Hotels has higher revenue and earnings than China Lodging Group, Limited. Hyatt Hotels is trading at a lower price-to-earnings ratio than China Lodging Group, Limited, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for China Lodging Group, Limited and Hyatt Hotels, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Lodging Group, Limited 0 2 5 0 2.71
Hyatt Hotels 0 10 2 0 2.17

China Lodging Group, Limited presently has a consensus target price of $64.67, indicating a potential downside of 34.92%. Hyatt Hotels has a consensus target price of $56.86, indicating a potential upside of 0.63%. Given Hyatt Hotels’ higher possible upside, analysts plainly believe Hyatt Hotels is more favorable than China Lodging Group, Limited.

Institutional and Insider Ownership

44.9% of China Lodging Group, Limited shares are owned by institutional investors. Comparatively, 31.1% of Hyatt Hotels shares are owned by institutional investors. 49.4% of China Lodging Group, Limited shares are owned by insiders. Comparatively, 25.5% of Hyatt Hotels shares are owned by 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.

Summary

China Lodging Group, Limited beats Hyatt Hotels on 10 of the 14 factors compared between the two stocks.

China Lodging Group, Limited Company Profile

China Lodging Group, Limited is a holding company. The Company is a multi-brand hotel group in China with leased, manachised and franchised models. Under the lease model, the Company directly operates hotels located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers the Company appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees. The Company has approximately 620 leased hotels; over 2,070 manachised hotels and approximately 80 franchised hotels in operation and over 20 leased hotels and approximately 660 manachised and franchised hotels under development. The Company offers approximately seven hotel brands that focus on various segments of customers: Joya Hotel, Manxin Hotels & Resorts, JI Hotel, Starway Hotel, Elan Hotel, HanTing Hotel and Hi Inn.

Hyatt Hotels Company Profile

Hyatt Hotels Corporation is a global hospitality company. The Company develops, owns, operates, manages, franchises, licenses or provides services to a portfolio of properties. The Company operates through four segments: owned and leased hotels; Americas management and franchising (Americas); ASPAC management and franchising (ASPAC), and EAME/SW Asia management and franchising (EAME/SW Asia). The owned and leased hotels segment consists of its owned and leased full service and select service hotels. The Americas segment consists of its management and franchising of properties located in the United States, Latin America, Canada and the Caribbean. The ASPAC segment consists of its management and franchising of properties located in Southeast Asia, as well as China, Australia, South Korea, Japan and Micronesia. The EAME/SW Asia segment consists of its management and franchising of properties located in Europe, Africa, the Middle East, India, Central Asia and Nepal.

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