Wyndham Hotels & Resorts (NYSE:WH) and Hyatt Hotels (NYSE:H) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Dividends

Wyndham Hotels & Resorts pays an annual dividend of $1.16 per share and has a dividend yield of 2.2%. Hyatt Hotels pays an annual dividend of $0.76 per share and has a dividend yield of 1.0%. Wyndham Hotels & Resorts pays out 42.8% of its earnings in the form of a dividend. Hyatt Hotels pays out 38.4% 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.

Institutional & Insider Ownership

92.5% of Wyndham Hotels & Resorts shares are held by institutional investors. Comparatively, 36.6% of Hyatt Hotels shares are held by institutional investors. 1.9% of Wyndham Hotels & Resorts shares are held by company insiders. Comparatively, 18.4% of Hyatt Hotels shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Wyndham Hotels & Resorts and Hyatt Hotels’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wyndham Hotels & Resorts $1.87 billion 2.80 $162.00 million $2.71 19.84
Hyatt Hotels $4.45 billion 1.81 $769.00 million $1.98 38.40

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

Analyst Ratings

This is a breakdown of recent recommendations for Wyndham Hotels & Resorts and Hyatt Hotels, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wyndham Hotels & Resorts 0 0 8 0 3.00
Hyatt Hotels 0 12 3 0 2.20

Wyndham Hotels & Resorts currently has a consensus target price of $71.29, indicating a potential upside of 32.60%. Hyatt Hotels has a consensus target price of $79.65, indicating a potential upside of 4.76%. Given Wyndham Hotels & Resorts’ stronger consensus rating and higher possible upside, equities analysts clearly believe Wyndham Hotels & Resorts is more favorable than Hyatt Hotels.

Profitability

This table compares Wyndham Hotels & Resorts and Hyatt Hotels’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wyndham Hotels & Resorts 8.62% 18.24% 5.95%
Hyatt Hotels 17.26% 5.93% 3.00%

Summary

Wyndham Hotels & Resorts beats Hyatt Hotels on 9 of the 15 factors compared between the two stocks.

Wyndham Hotels & Resorts Company Profile

Wyndham Hotels & Resorts, Inc. operates as a hotel franchisor worldwide. The company licenses its hotel brands, including Super 8, Days Inn, Ramada, Microtel Inn & Suites, La Quinta, Wingate, AmericInn, Hawthorn Suites, The Trademark Collection, and Wyndham to hotel owners in approximately 80 countries. Its Hotel Franchising segments licenses its lodging brands and provides related services to third-party hotel owners and others. The company's Hotel Management segment provides hotel management services for full-service and limited service hotels. Wyndham Hotels & Resorts, Inc. operates a portfolio of 20 hotel brands with approximately 9,200 franchised hotels with 810,000 rooms; and manages hotels, including 438 third-party-owned properties and 2 owned properties. It is also involved in the loyalty program business. The company was incorporated in 2017 and is headquartered in Parsippany, New Jersey.

Hyatt Hotels Company Profile

Hyatt Hotels Corporation, a hospitality company, develops, owns, operates, manages, franchises, licenses, or provides services to hotels, resorts, residential, and other properties. It operates through four segments: Owned and Leased Hotels, Americas Management and Franchising, ASPAC Management and Franchising, and EAME/SW Asia Management and Franchising. The company operates its properties under the Hyatt, Park Hyatt, Miraval, Alila, Grand Hyatt, Hyatt Regency, Andaz, Hyatt Centric, The Unbound Collection by Hyatt, Destination Hotels, Thompson Hotels, Joie de Vivre Hotels, Hyatt Place, Hyatt House, tommie, Hyatt Ziva, Hyatt Zilara, Hyatt Residence Club, Exhale, Hyatt Residences, World of Hyatt, and Hyatt Resorts brands and trademarks. As of December 31, 2018, its portfolio consisted of 843 properties, which included approximately 208,207 rooms in 60 countries. It primarily serves corporations; national, state, and regional associations; specialty market accounts, including social, government, military, educational, religious, and fraternal accounts; travel agency and luxury organizations; and a group of individual consumers. Hyatt Hotels Corporation has a strategic alliance with Small Luxury Hotels to provide benefits to the members of World of Hyatt loyalty program by providing additional stay opportunities at luxury hotels primarily in Europe. The company was formerly known as Global Hyatt Corporation and changed its name to Hyatt Hotels Corporation in June 2009. Hyatt Hotels Corporation was founded in 1957 and is headquartered in Chicago, Illinois.

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