Red Lion Hotels (NYSE:RLH) and MGM Resorts International (NYSE:MGM) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.
Profitability
This table compares Red Lion Hotels and MGM Resorts International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Red Lion Hotels | -34.60% | -16.94% | -12.88% |
| MGM Resorts International | 20.81% | -12.08% | -4.10% |
Analyst Recommendations
This is a summary of current ratings and price targets for Red Lion Hotels and MGM Resorts International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Red Lion Hotels | 0 | 1 | 0 | 0 | 2.00 |
| MGM Resorts International | 3 | 11 | 4 | 0 | 2.06 |
Red Lion Hotels presently has a consensus price target of $3.50, indicating a potential upside of 0.29%. MGM Resorts International has a consensus price target of $30.0667, indicating a potential downside of 26.22%. Given Red Lion Hotels' higher possible upside, research analysts clearly believe Red Lion Hotels is more favorable than MGM Resorts International.
Valuation & Earnings
This table compares Red Lion Hotels and MGM Resorts International's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Red Lion Hotels | $114.29 million | 0.78 | $-19,030,000.00 | N/A | N/A |
| MGM Resorts International | $12.90 billion | 1.56 | $2.05 billion | $0.77 | 52.92 |
MGM Resorts International has higher revenue and earnings than Red Lion Hotels.
Risk and Volatility
Red Lion Hotels has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, MGM Resorts International has a beta of 2.42, indicating that its share price is 142% more volatile than the S&P 500.
Institutional and Insider Ownership
65.0% of Red Lion Hotels shares are owned by institutional investors. Comparatively, 63.4% of MGM Resorts International shares are owned by institutional investors. 2.1% of Red Lion Hotels shares are owned by company insiders. Comparatively, 5.1% of MGM Resorts International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
MGM Resorts International beats Red Lion Hotels on 11 of the 13 factors compared between the two stocks.
