Contrasting Marriott International (MAR) and China Lodging Group, Limited (HTHT)

Marriott International (NASDAQ: MAR) and China Lodging Group, Limited (NASDAQ:HTHT) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitabiliy, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Marriott International and China Lodging Group, Limited, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marriott International	1	6	8	0	2.47
China Lodging Group, Limited	0	2	5	0	2.71

Marriott International presently has a consensus price target of $96.50, suggesting a potential downside of 6.16%. China Lodging Group, Limited has a consensus price target of $64.67, suggesting a potential downside of 30.85%. Given Marriott International’s higher possible upside, equities analysts clearly believe Marriott International is more favorable than China Lodging Group, Limited.

Dividends

Marriott International pays an annual dividend of $1.32 per share and has a dividend yield of 1.3%. China Lodging Group, Limited does not pay a dividend. Marriott International pays out 47.5% of its earnings in the form of a dividend.

Insider and Institutional Ownership

67.0% of Marriott International shares are owned by institutional investors. Comparatively, 44.7% of China Lodging Group, Limited shares are owned by institutional investors. 17.1% of Marriott International shares are owned by insiders. Comparatively, 49.4% of China Lodging Group, Limited shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Marriott International and China Lodging Group, Limited’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Marriott International	$4.02 billion	9.69	$2.25 billion	$2.78	36.99
China Lodging Group, Limited	$986.06 million	6.60	$262.76 million	$1.84	50.82

Marriott International has higher revenue and earnings than China Lodging Group, Limited. Marriott International is trading at a lower price-to-earnings ratio than China Lodging Group, Limited, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Marriott International and China Lodging Group, Limited’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%
China Lodging Group, Limited	13.29%	16.80%	9.09%

Volatility & Risk

Marriott International has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, China Lodging Group, Limited has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500.

Summary

Marriott International beats China Lodging Group, Limited on 9 of the 16 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.

China Lodging Group, Limited Company Profile

China Lodging Group, Limited is a holding company. The Company is a multi-brand hotel group in China with leased, manachised and franchised models. Under the lease model, the Company directly operates hotels located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers the Company appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees. The Company has approximately 620 leased hotels; over 2,070 manachised hotels and approximately 80 franchised hotels in operation and over 20 leased hotels and approximately 660 manachised and franchised hotels under development. The Company offers approximately seven hotel brands that focus on various segments of customers: Joya Hotel, Manxin Hotels & Resorts, JI Hotel, Starway Hotel, Elan Hotel, HanTing Hotel and Hi Inn.