Marriott International (NASDAQ: MAR) and Marriot Vacations Worldwide Corporation (NYSE:VAC) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitabiliy, institutional ownership, valuation, earnings and dividends.

Insider and Institutional Ownership

67.0% of Marriott International shares are owned by institutional investors. Comparatively, 79.2% of Marriot Vacations Worldwide Corporation shares are owned by institutional investors. 17.1% of Marriott International shares are owned by insiders. Comparatively, 3.3% of Marriot Vacations Worldwide Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Marriott International has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Marriot Vacations Worldwide Corporation has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Marriott International and Marriot Vacations Worldwide Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marriott International 1 6 8 0 2.47
Marriot Vacations Worldwide Corporation 0 2 5 0 2.71

Marriott International presently has a consensus target price of $96.50, indicating a potential downside of 8.11%. Marriot Vacations Worldwide Corporation has a consensus target price of $114.29, indicating a potential downside of 0.83%. Given Marriot Vacations Worldwide Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Marriot Vacations Worldwide Corporation is more favorable than Marriott International.

Profitability

This table compares Marriott International and Marriot Vacations Worldwide Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marriott International 4.91% 38.10% 6.17%
Marriot Vacations Worldwide Corporation 7.90% 16.96% 6.53%

Dividends

Marriott International pays an annual dividend of $1.32 per share and has a dividend yield of 1.3%. Marriot Vacations Worldwide Corporation pays an annual dividend of $1.40 per share and has a dividend yield of 1.2%. Marriott International pays out 47.5% of its earnings in the form of a dividend. Marriot Vacations Worldwide Corporation pays out 25.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Marriott International has raised its dividend for 2 consecutive years. Marriott International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Marriott International and Marriot Vacations Worldwide Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Marriott International $4.02 billion 9.90 $2.25 billion $2.78 37.78
Marriot Vacations Worldwide Corporation $1.30 billion 2.41 $255.26 million $5.56 20.73

Marriott International has higher revenue and earnings than Marriot Vacations Worldwide Corporation. Marriot Vacations Worldwide Corporation is trading at a lower price-to-earnings ratio than Marriott International, indicating that it is currently the more affordable of the two stocks.

Summary

Marriott International beats Marriot Vacations Worldwide Corporation on 10 of the 17 factors compared between the two stocks.

Marriott International Company Profile

Marriott International, Inc. (Marriott International) is a lodging company. Marriott International operates in three business segments: North American Full-Service, North American Limited-Service and International. Its North American Full-Service segment includes its Luxury and Premium brands (JW Marriott, Marriott Hotels, Sheraton, Westin, Renaissance Hotels, Le Meridien, Autograph Collection Hotels, Delta Hotels, Gaylord Hotels, and Tribute Portfolio) located in the United States and Canada. Its North American Limited-Service segment includes Select brands (Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, Element Hotels and Moxy Hotels) located in the United States and Canada. Its International segment includes JW Marriott, St. Regis, EDITION, Bulgari Hotels & Resorts, Marriott Hotels, Sheraton, Westin, Four Points, Aloft Hotels, AC Hotels by Marriott, Protea Hotels, Element Hotels, and Moxy Hotels located outside the United States and Canada.

Marriot Vacations Worldwide Corporation Company Profile

Marriott Vacations Worldwide Corporation focuses on vacation ownership, based on number of owners, number of resorts and revenues. The Company is an exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Company operates through three segments North America, Europe and Asia Pacific. In the North America segment, it develops, markets, sells and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. Its Europe segment is engaged in selling its existing projects and managing existing resorts. Its Asia Pacific segment, it develops, markets, sells and manages two points-based programs that it designed to appeal to the vacation preferences of the market, Marriott Vacation Club, Asia Pacific and Marriott Vacation Club Destinations, Australia, as well as a weeks-based right-to-use product.

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