Playa Hotels & Resorts (NASDAQ:PLYA) and Sunstone Hotel Investors (NYSE:SHO) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.
Volatility and Risk
Playa Hotels & Resorts has a beta of 2.22, suggesting that its stock price is 122% more volatile than the S&P 500. Comparatively, Sunstone Hotel Investors has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.
Profitability
This table compares Playa Hotels & Resorts and Sunstone Hotel Investors' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Playa Hotels & Resorts | -58.88% | -19.90% | -6.60% |
| Sunstone Hotel Investors | -64.37% | -15.09% | -8.96% |
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Playa Hotels & Resorts and Sunstone Hotel Investors, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Playa Hotels & Resorts | 1 | 3 | 2 | 0 | 2.17 |
| Sunstone Hotel Investors | 2 | 4 | 2 | 0 | 2.00 |
Playa Hotels & Resorts presently has a consensus price target of $5.25, suggesting a potential downside of 27.49%. Sunstone Hotel Investors has a consensus price target of $10.3333, suggesting a potential downside of 15.92%. Given Sunstone Hotel Investors' higher possible upside, analysts clearly believe Sunstone Hotel Investors is more favorable than Playa Hotels & Resorts.
Earnings and Valuation
This table compares Playa Hotels & Resorts and Sunstone Hotel Investors' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Playa Hotels & Resorts | $636.48 million | 1.86 | $-4,360,000.00 | $0.07 | 102.86 |
| Sunstone Hotel Investors | $1.12 billion | 2.38 | $135.73 million | $1.12 | 10.97 |
Sunstone Hotel Investors has higher revenue and earnings than Playa Hotels & Resorts. Sunstone Hotel Investors is trading at a lower price-to-earnings ratio than Playa Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
70.2% of Playa Hotels & Resorts shares are held by institutional investors. Comparatively, 99.2% of Sunstone Hotel Investors shares are held by institutional investors. 4.1% of Playa Hotels & Resorts shares are held by insiders. Comparatively, 1.2% of Sunstone Hotel Investors shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
Sunstone Hotel Investors beats Playa Hotels & Resorts on 7 of the 13 factors compared between the two stocks.
