Analyzing Choice Hotels (NYSE:CHH) and The Competition

Choice Hotels (NYSE: CHH) is one of 30 publicly-traded companies in the “Hotels & motels” industry, but how does it contrast to its competitors? We will compare Choice Hotels to similar companies based on the strength of its dividends, valuation, earnings, risk, analyst recommendations, institutional ownership and profitability.

Valuation and Earnings

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This table compares Choice Hotels and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Choice Hotels $1.01 billion $114.89 million 28.07
Choice Hotels Competitors $3.57 billion $470.05 million 184.05

Choice Hotels’ competitors have higher revenue and earnings than Choice Hotels. Choice Hotels is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of current recommendations for Choice Hotels and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Choice Hotels 2 6 0 0 1.75
Choice Hotels Competitors 308 1443 2192 75 2.51

Choice Hotels presently has a consensus price target of $75.29, suggesting a potential downside of 6.88%. As a group, “Hotels & motels” companies have a potential upside of 1.85%. Given Choice Hotels’ competitors stronger consensus rating and higher probable upside, analysts plainly believe Choice Hotels has less favorable growth aspects than its competitors.

Volatility and Risk

Choice Hotels has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Choice Hotels’ competitors have a beta of 1.15, indicating that their average share price is 15% more volatile than the S&P 500.

Profitability

This table compares Choice Hotels and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Choice Hotels 11.40% -68.40% 17.51%
Choice Hotels Competitors 10.97% 12.75% 4.81%

Dividends

Choice Hotels pays an annual dividend of $0.86 per share and has a dividend yield of 1.1%. Choice Hotels pays out 29.9% of its earnings in the form of a dividend. As a group, “Hotels & motels” companies pay a dividend yield of 1.8% and pay out 48.0% of their earnings in the form of a dividend. Choice Hotels has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

51.5% of Choice Hotels shares are held by institutional investors. Comparatively, 69.0% of shares of all “Hotels & motels” companies are held by institutional investors. 22.0% of Choice Hotels shares are held by company insiders. Comparatively, 19.0% of shares of all “Hotels & motels” companies 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.

Summary

Choice Hotels competitors beat Choice Hotels on 11 of the 15 factors compared.

Choice Hotels Company Profile

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. It operates through Hotel Franchising and SkyTouch Technology segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. It also develops and markets cloud-based technology products to the hotel industry, including inventory management, pricing, and connectivity to third party channels and hoteliers; and provides onsite and remote installation, training, and phone support services. As of March 28, 2018, the company franchised approximately 6,800 hotels with 500,000 rooms. Choice Hotels International, Inc. was founded in 1939 and is based in Rockville, Maryland.

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