Penn National Gaming (PENN) versus Red Lion Hotels (RLH) Head-To-Head Contrast

Red Lion Hotels (NYSE:RLH) and Penn National Gaming (NASDAQ:PENN) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.

Insider and Institutional Ownership

75.1% of Red Lion Hotels shares are owned by institutional investors. Comparatively, 95.0% of Penn National Gaming shares are owned by institutional investors. 19.7% of Red Lion Hotels shares are owned by insiders. Comparatively, 10.6% of Penn National Gaming shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Red Lion Hotels and Penn National Gaming, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Lion Hotels 0 0 1 0 3.00
Penn National Gaming 0 1 6 0 2.86

Red Lion Hotels presently has a consensus price target of $13.00, suggesting a potential upside of 75.20%. Penn National Gaming has a consensus price target of $31.86, suggesting a potential upside of 61.08%. Given Red Lion Hotels’ stronger consensus rating and higher probable upside, research analysts plainly believe Red Lion Hotels is more favorable than Penn National Gaming.

Valuation and Earnings

This table compares Red Lion Hotels and Penn National Gaming’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Red Lion Hotels $135.85 million 1.35 $1.96 million ($0.45) -16.49
Penn National Gaming $3.59 billion 0.65 $93.51 million $0.93 21.27

Penn National Gaming has higher revenue and earnings than Red Lion Hotels. Red Lion Hotels is trading at a lower price-to-earnings ratio than Penn National Gaming, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Red Lion Hotels has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Penn National Gaming has a beta of 1.85, meaning that its share price is 85% more volatile than the S&P 500.

Profitability

This table compares Red Lion Hotels and Penn National Gaming’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Lion Hotels 1.44% -9.57% -6.65%
Penn National Gaming 2.20% 32.22% 1.26%

Summary

Penn National Gaming beats Red Lion Hotels on 10 of the 14 factors compared between the two stocks.

Red Lion Hotels Company Profile

Red Lion Hotels Corporation, doing business as RLH Corporation, operates as a hospitality and leisure company the United States. It operates in two segments, Company Operated Hotels and Franchised Hotels. The company owns, manages, and franchises upscale, midscale, and economy hotels under the Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, GuestHouse, Settle Inn, Americas Best Value Inn, Canadas Best Value Inn, Signature and Signature Inn, Knights Inn, and Country Hearth Inns & Suites brands. It also develops technology and system offerings for the hospitality industry. As of December 31, 2018, it had a network of 1,318 franchised hotels, including a total of 83,800 rooms. The company was formerly known as WestCoast Hospitality Corporation and changed its name to Red Lion Hotels Corporation in September 2005. Red Lion Hotels Corporation was founded in 1937 and is headquartered in Denver, Colorado.

Penn National Gaming Company Profile

Penn National Gaming, Inc. owns and manages gaming and racing facilities, and operates video gaming terminals with a focus on slot machine entertainment. The company operates through four segments: Northeast, South, West, and Midwest. As of December 31, 2018, it owned, managed, or had ownership interests in 40 facilities in 18 jurisdictions. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.

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