La Quinta Holdings (LQ) and Morgans Hotel Group (MHGC) Critical Review
La Quinta Holdings (NYSE: LQ) and Morgans Hotel Group (NASDAQ:MHGC) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.
Institutional & Insider Ownership
97.0% of La Quinta Holdings shares are owned by institutional investors. Comparatively, 33.2% of Morgans Hotel Group shares are owned by institutional investors. 1.6% of La Quinta Holdings shares are owned by insiders. Comparatively, 1.8% of Morgans Hotel Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of recent recommendations for La Quinta Holdings and Morgans Hotel Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|La Quinta Holdings||1||4||2||0||2.14|
|Morgans Hotel Group||0||0||0||0||N/A|
La Quinta Holdings currently has a consensus price target of $12.69, suggesting a potential downside of 21.81%. Given La Quinta Holdings’ higher possible upside, equities research analysts clearly believe La Quinta Holdings is more favorable than Morgans Hotel Group.
This table compares La Quinta Holdings and Morgans Hotel Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|La Quinta Holdings||4.13%||7.28%||1.67%|
|Morgans Hotel Group||-17.23%||N/A||-6.56%|
Volatility and Risk
La Quinta Holdings has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, Morgans Hotel Group has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.
Valuation and Earnings
This table compares La Quinta Holdings and Morgans Hotel Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|La Quinta Holdings||$966.42 million||1.97||$299.78 million||$0.35||46.37|
|Morgans Hotel Group||N/A||N/A||N/A||$0.23||9.35|
La Quinta Holdings has higher revenue and earnings than Morgans Hotel Group. Morgans Hotel Group is trading at a lower price-to-earnings ratio than La Quinta Holdings, indicating that it is currently the more affordable of the two stocks.
La Quinta Holdings beats Morgans Hotel Group on 9 of the 10 factors compared between the two stocks.
La Quinta Holdings Company Profile
La Quinta Holdings Inc. is an owner, operator and franchisor of select-service hotels primarily serving the midscale and upper-midscale sectors under the La Quinta brand. The Company’s segments include owned hotels, franchise and management, and corporate and other. The owned hotels segment is engaged in the operation of owned hotel properties. The franchise and management segment is engaged in various license, franchise and management agreements relating to its owned and franchised hotels. As of December 31, 2016, its portfolio consisted of 888 hotels representing approximately 87,200 rooms located primarily across 48 states in the United States, as well as in Canada, Mexico, Honduras and Colombia, of which 322 hotels were owned and operated, and 566 were franchised. As of December 31, 2016, the Company had a pipeline of 248 franchised hotels in the United States, Mexico, Colombia, Nicaragua, Guatemala, Chile and El Salvador.
Morgans Hotel Group Company Profile
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.
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