Critical Analysis: Diamond Resorts International (DRII) vs. Peak Resorts (SKIS)
Diamond Resorts International (NYSE: DRII) and Peak Resorts (NASDAQ:SKIS) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.
This table compares Diamond Resorts International and Peak Resorts’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Diamond Resorts International||10.37%||30.25%||4.88%|
Peak Resorts pays an annual dividend of $0.28 per share and has a dividend yield of 5.5%. Diamond Resorts International does not pay a dividend. Peak Resorts pays out -90.3% of its earnings in the form of a dividend.
This is a summary of recent ratings and target prices for Diamond Resorts International and Peak Resorts, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Diamond Resorts International||0||0||0||0||N/A|
Peak Resorts has a consensus price target of $6.29, indicating a potential upside of 23.25%. Given Peak Resorts’ higher probable upside, analysts clearly believe Peak Resorts is more favorable than Diamond Resorts International.
Valuation & Earnings
This table compares Diamond Resorts International and Peak Resorts’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Diamond Resorts International||N/A||N/A||N/A||$1.94||15.58|
|Peak Resorts||$123.25 million||0.58||$1.24 million||($0.31)||-16.45|
Peak Resorts has higher revenue and earnings than Diamond Resorts International. Peak Resorts is trading at a lower price-to-earnings ratio than Diamond Resorts International, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
44.9% of Peak Resorts shares are held by institutional investors. 16.5% of Peak Resorts shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
Diamond Resorts International has a beta of 2.01, suggesting that its stock price is 101% more volatile than the S&P 500. Comparatively, Peak Resorts has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.
Peak Resorts beats Diamond Resorts International on 7 of the 12 factors compared between the two stocks.
Diamond Resorts International Company Profile
Diamond Resorts International, Inc. (DRII) is engaged in the hospitality and vacation ownership industry. The Company operates through two segments: hospitality and management services, and Vacation Interest Sales and Financing. Its hospitality and management services segment manages a network of resort properties and provides services to a member base across the world. Its Vacation Interest sales and financing segment manages over 110 resort properties, as well the Diamond Collections, each of which holds ownership interests in a group of resort properties, (including its managed resorts). The Company sells vacation ownership interests (VOIs) through presentations, which the Company refers to as tours, at its over 60 sales centers, all of which are located at its managed resorts. It has a network of over 380 vacation destinations located in approximately 30 countries throughout the continental United States, Hawaii, Canada, Mexico, Europe, Asia, Australia, New Zealand and Africa.
Peak Resorts Company Profile
Peak Resorts, Inc. is a holding company. The Company, through its subsidiaries, owns or leases, and operates day ski and overnight drive ski resorts. The Company’s ski resort operations consist of snow skiing, snowboarding and snow sports areas in Wildwood and Weston, Missouri; Bellefontaine and Cleveland, Ohio; Paoli, Indiana; Blakeslee and Lake Harmony, Pennsylvania; Bartlett, Bennington and Pinkham Notch, New Hampshire; West Dover, Vermont, and Hunter, New York, and an 18 hole golf course in West Dover, Vermont. It also manages hotels in Bartlett, New Hampshire; West Dover, Vermont, and Hunter, New York. As of April 30, 2016, the Company operates 14 ski resorts, which consist of six overnight drive ski resorts and eight day ski resorts located across seven states, ranging from Missouri to New Hampshire, and appeal to a range of visitors. As of April 30, 2016, the Company’s resorts comprises approximately 1,860 acres of skiable terrain that appeal to a range of ages and abilities.
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