Playa Hotels & Resorts (PLYA) versus Hilton Hotels (HLT) Critical Survey

Playa Hotels & Resorts (NASDAQ:PLYA) and Hilton Hotels (NYSE:HLT) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

This table compares Playa Hotels & Resorts and Hilton Hotels’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Playa Hotels & Resorts 3.08% 4.88% 1.90%
Hilton Hotels 8.58% 98.93% 6.04%

Dividends

Hilton Hotels pays an annual dividend of $0.60 per share and has a dividend yield of 0.7%. Playa Hotels & Resorts does not pay a dividend. Hilton Hotels pays out 21.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings for Playa Hotels & Resorts and Hilton Hotels, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Playa Hotels & Resorts 0 2 2 0 2.50
Hilton Hotels 0 3 14 1 2.89

Playa Hotels & Resorts currently has a consensus price target of $12.00, indicating a potential upside of 49.81%. Hilton Hotels has a consensus price target of $86.98, indicating a potential downside of 0.28%. Given Playa Hotels & Resorts’ higher probable upside, equities research analysts plainly believe Playa Hotels & Resorts is more favorable than Hilton Hotels.

Risk & Volatility

Playa Hotels & Resorts has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Hilton Hotels has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Insider & Institutional Ownership

70.2% of Playa Hotels & Resorts shares are owned by institutional investors. Comparatively, 96.6% of Hilton Hotels shares are owned by institutional investors. 3.7% of Playa Hotels & Resorts shares are owned by insiders. Comparatively, 1.8% of Hilton Hotels shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Playa Hotels & Resorts and Hilton Hotels’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Playa Hotels & Resorts $617.01 million 1.69 $18.98 million $0.32 25.03
Hilton Hotels $8.91 billion 2.86 $764.00 million $2.79 31.27

Hilton Hotels has higher revenue and earnings than Playa Hotels & Resorts. Playa Hotels & Resorts is trading at a lower price-to-earnings ratio than Hilton Hotels, indicating that it is currently the more affordable of the two stocks.

Summary

Hilton Hotels beats Playa Hotels & Resorts on 14 of the 17 factors compared between the two stocks.

Playa Hotels & Resorts Company Profile

Playa Hotels & Resorts N.V. owns, operates, and develops all-inclusive resorts in prime beachfront locations in various vacation destinations in Mexico and the Caribbean. The company operates under eight brand names. As of February 28, 2019, it owned a portfolio consisting of 21 resorts comprising 7,908 rooms located in Mexico, Jamaica, and the Dominican Republic. Playa Hotels & Resorts N.V. is headquartered in Fairfax, Virginia.

Hilton Hotels Company Profile

Hilton Worldwide Holdings Inc., a hospitality company, owns, leases, manages, develops, and franchises hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. The company engages in the hotel management and licensing of its brands to franchisees. It operates hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Hilton Hotels & Resorts, Curio Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton, Embassy Suites by Hilton, Motto by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton, and Hilton Grand Vacations brands. It operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. As of March 29, 2019, the company had approximately 5,600 properties with approximately 913,000 rooms in 113 countries and territories. Hilton Worldwide Holdings Inc. was founded in 1919 and is headquartered in McLean, Virginia.

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