Reviewing Playa Hotels & Resorts (PLYA) & InterContinental Hotels Group (IHG)

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

Dividends

InterContinental Hotels Group pays an annual dividend of $1.02 per share and has a dividend yield of 1.5%. Playa Hotels & Resorts does not pay a dividend. InterContinental Hotels Group pays out 42.0% of its earnings in the form of a dividend. InterContinental Hotels Group has raised its dividend for 5 consecutive years.

Volatility and Risk

Playa Hotels & Resorts has a beta of -0.02, suggesting that its share price is 102% less volatile than the S&P 500. Comparatively, InterContinental Hotels Group has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Earnings & Valuation

This table compares Playa Hotels & Resorts and InterContinental Hotels Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Playa Hotels & Resorts $559.54 million 2.10 -$240,000.00 $0.38 28.08
InterContinental Hotels Group $1.78 billion 7.10 $592.00 million $2.43 27.35

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

Institutional & Insider Ownership

83.3% of Playa Hotels & Resorts shares are owned by institutional investors. Comparatively, 6.4% of InterContinental Hotels Group shares are owned by institutional investors. 2.7% of Playa Hotels & Resorts shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Playa Hotels & Resorts -1.08% 6.46% 2.27%
InterContinental Hotels Group N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Playa Hotels & Resorts and InterContinental Hotels Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Playa Hotels & Resorts 0 0 3 0 3.00
InterContinental Hotels Group 0 4 2 0 2.33

Playa Hotels & Resorts presently has a consensus price target of $14.92, suggesting a potential upside of 39.80%. InterContinental Hotels Group has a consensus price target of $64.19, suggesting a potential downside of 3.43%. Given Playa Hotels & Resorts’ stronger consensus rating and higher possible upside, equities analysts clearly believe Playa Hotels & Resorts is more favorable than InterContinental Hotels Group.

Summary

Playa Hotels & Resorts beats InterContinental Hotels Group on 9 of the 17 factors compared between the two stocks.

Playa Hotels & Resorts Company Profile

Playa Hotels & Resorts N.V. owns, operates, develops, and manages all-inclusive resorts in prime beachfront locations in various vacation destinations in Mexico and the Caribbean. The company owns, operates, and manages resorts under the Hyatt Ziva, Panama Jack, Dreams, Sanctuary, Hyatt Zilara, THE Royal, and Secrets brand names. As of December 31, 2017, it owned a portfolio consisting of 13 resorts comprising 6,130 rooms located in Mexico, the Dominican Republic, and Jamaica. Playa Hotels & Resorts N.V. is headquartered in Fairfax, Virginia.

InterContinental Hotels Group Company Profile

InterContinental Hotels Group PLC owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China. The company operates hotels, resorts, and restaurants under the InterContinental, Kimpton, Hotel Indigo, EVEN, HUALUXE, Crowne Plaza, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, Holiday Inn Resort, avid, Staybridge Suites, and Candlewood Suites brands. It also provides IHG Rewards Club, a hotel loyalty program. As of December 31, 2017, the company had 5,348 hotels with 798,075 rooms. InterContinental Hotels Group PLC was founded in 1967 and is headquartered in Denham, the United Kingdom.

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