China Lodging Group, Limited (NASDAQ: HTHT) and Intercontinental Hotels Group (NYSE:IHG) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.
This table compares China Lodging Group, Limited and Intercontinental Hotels Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Lodging Group, Limited||13.69%||17.26%||8.62%|
|Intercontinental Hotels Group||N/A||N/A||N/A|
Intercontinental Hotels Group pays an annual dividend of $0.98 per share and has a dividend yield of 1.9%. China Lodging Group, Limited does not pay a dividend. Intercontinental Hotels Group has raised its dividend for 4 consecutive years.
Insider & Institutional Ownership
38.0% of China Lodging Group, Limited shares are held by institutional investors. Comparatively, 6.7% of Intercontinental Hotels Group shares are held by institutional investors. 49.4% of China Lodging Group, Limited shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current recommendations for China Lodging Group, Limited and Intercontinental Hotels Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Lodging Group, Limited||0||1||6||0||2.86|
|Intercontinental Hotels Group||1||4||2||0||2.14|
China Lodging Group, Limited currently has a consensus target price of $77.17, indicating a potential downside of 35.89%. Intercontinental Hotels Group has a consensus target price of $44.00, indicating a potential downside of 14.58%. Given Intercontinental Hotels Group’s higher probable upside, analysts plainly believe Intercontinental Hotels Group is more favorable than China Lodging Group, Limited.
Volatility & Risk
China Lodging Group, Limited has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Intercontinental Hotels Group has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.
Earnings and Valuation
This table compares China Lodging Group, Limited and Intercontinental Hotels Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|China Lodging Group, Limited||$1.06 billion||7.92||$299.25 million||$1.97||61.10|
|Intercontinental Hotels Group||$1.73 billion||5.84||$780.00 million||N/A||N/A|
Intercontinental Hotels Group has higher revenue and earnings than China Lodging Group, Limited.
China Lodging Group, Limited beats Intercontinental Hotels Group on 9 of the 14 factors compared between the two stocks.
About China Lodging Group, Limited
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.
About Intercontinental Hotels Group
InterContinental Hotels Group PLC is a hotel company. The Company franchises its brands to, and manages hotels on behalf of, third-party hotel owners. Its segments include The Americas; Europe; Asia, Middle East and Africa (AMEA); Greater China, and Central. It operates a portfolio of hotel brands, including InterContinental, HUALUXE, Kimpton, Crowne Plaza, Hotel Indigo, EVEN Hotels, Holiday Inn, Holiday Inn Express, Staybridge Suites Hotels, Holiday Inn Resort, Holiday Inn Club Vacations and Candlewood Suites Hotels. As of December 31, 2016, The Americas pipeline totaled 945 hotels (102,451 rooms). As of December 31, 2016, the Europe pipeline totaled 137 hotels (23,954 rooms). As of December 31, 2016, the AMEA pipeline totaled 149 hotels (39,643 rooms). As of December 31, 2016, the Greater China pipeline totaled 239 hotels (64,028 rooms). As of April 21, 2017, it had 5,200 hotels and 777,000 rooms in its system. As of April 21, 2017, it operated in over 100 countries globally.
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