Starwood Hotels & Resorts Worldwide (NYSE: HOT) and Hilton Worldwide Holdings (NYSE:HLT) are both cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Starwood Hotels & Resorts Worldwide and Hilton Worldwide Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starwood Hotels & Resorts Worldwide 0 0 0 0 N/A
Hilton Worldwide Holdings 1 5 11 0 2.59

Hilton Worldwide Holdings has a consensus price target of $70.71, indicating a potential upside of 3.70%. Given Hilton Worldwide Holdings’ higher probable upside, analysts clearly believe Hilton Worldwide Holdings is more favorable than Starwood Hotels & Resorts Worldwide.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Starwood Hotels & Resorts Worldwide N/A N/A N/A $0.48 160.52
Hilton Worldwide Holdings $7.39 billion 2.99 $2.78 billion $0.13 524.30

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

Insider and Institutional Ownership

83.5% of Starwood Hotels & Resorts Worldwide shares are owned by institutional investors. Comparatively, 99.3% of Hilton Worldwide Holdings shares are owned by institutional investors. 0.7% of Starwood Hotels & Resorts Worldwide shares are owned by insiders. Comparatively, 1.5% of Hilton Worldwide Holdings 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.

Dividends

Starwood Hotels & Resorts Worldwide pays an annual dividend of $1.50 per share and has a dividend yield of 1.9%. Hilton Worldwide Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. Starwood Hotels & Resorts Worldwide pays out 312.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hilton Worldwide Holdings pays out 461.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Hotels & Resorts Worldwide has raised its dividend for 7 consecutive years. Starwood Hotels & Resorts Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Starwood Hotels & Resorts Worldwide -2.81% -18.50% -1.83%
Hilton Worldwide Holdings 0.39% 19.65% 3.76%

Risk & Volatility

Starwood Hotels & Resorts Worldwide has a beta of 1.99, indicating that its share price is 99% more volatile than the S&P 500. Comparatively, Hilton Worldwide Holdings has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Summary

Hilton Worldwide Holdings beats Starwood Hotels & Resorts Worldwide on 8 of the 13 factors compared between the two stocks.

Starwood Hotels & Resorts Worldwide Company Profile

Starwood Hotels & Resorts Worldwide, LLC, formerly Starwood Hotels & Resorts Worldwide, Inc., is a hotel and leisure company. The Company’s hotel business is focused on the global operation of hotels and resorts primarily in the luxury and upper upscale segments of the lodging industry. The Company manages and operates its hotel business in three hotel segments: the Americas; Europe, Africa and the Middle East (EAME), and Asia Pacific. Its vacation ownership and residential business is a separate segment. The Company conducts its hotel and leisure business both directly and through its subsidiaries. It owns Starwood Vacation Ownership, Inc., a provider of vacation experiences through villa-style resorts and access to Starwood brands. The Starwood Preferred Guest program is its traveler, customer loyalty and multi-brand marketing program. The Company also develops, owns and operates vacation ownership resorts, and markets and sells the vacation ownership Interests in the resorts.

Hilton Worldwide Holdings Company Profile

Hilton Worldwide Holdings Inc. is a hospitality company. The Company is engaged in owning, leasing, managing and franchising hotels and resorts. The Company’s segments include ownership, and management and franchise. Its global portfolio of owned and leased properties includes a range of hotels in gateway cities, such as New York City, London, San Francisco, Chicago, Sao Paolo and Tokyo. The Company’s management and franchise segment manages hotels and licenses its brands to franchisees. Its brand portfolio includes Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio-A Collection by Hilton, DoubleTree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton. As of December 31, 2016, the Company owned, leased, managed or franchised 4,875 hotel and resort properties, totaling 796,440 rooms in 104 countries and territories.

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