Wyndham Hotels & Resorts (NYSE:WH) and MGM Resorts International (NYSE:MGM) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.
Dividends
Wyndham Hotels & Resorts pays an annual dividend of $0.64 per share and has a dividend yield of 0.9%. MGM Resorts International pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Wyndham Hotels & Resorts pays out 19.5% of its earnings in the form of a dividend. MGM Resorts International pays out 1.3% 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. Wyndham Hotels & Resorts has raised its dividend for 1 consecutive years and MGM Resorts International has raised its dividend for 1 consecutive years.
Profitability
This table compares Wyndham Hotels & Resorts and MGM Resorts International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Wyndham Hotels & Resorts | -2.50% | 21.25% | 4.99% |
| MGM Resorts International | 20.81% | -12.08% | -4.10% |
Insider and Institutional Ownership
93.0% of Wyndham Hotels & Resorts shares are held by institutional investors. Comparatively, 63.4% of MGM Resorts International shares are held by institutional investors. 1.8% of Wyndham Hotels & Resorts shares are held by insiders. Comparatively, 5.1% of MGM Resorts International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Risk and Volatility
Wyndham Hotels & Resorts has a beta of 1.73, indicating that its share price is 73% 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.
Earnings and Valuation
This table compares Wyndham Hotels & Resorts and MGM Resorts International's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Wyndham Hotels & Resorts | $2.05 billion | 3.28 | $157 million | $3.28 | 22.01 |
| MGM Resorts International | $12.90 billion | 1.60 | $2.05 billion | $0.77 | 54.25 |
MGM Resorts International has higher revenue and earnings than Wyndham Hotels & Resorts. Wyndham Hotels & Resorts is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent recommendations for Wyndham Hotels & Resorts and MGM Resorts International, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Wyndham Hotels & Resorts | 0 | 0 | 12 | 0 | 3.00 |
| MGM Resorts International | 3 | 11 | 5 | 0 | 2.11 |
Wyndham Hotels & Resorts currently has a consensus target price of $59.0833, suggesting a potential downside of 18.14%. MGM Resorts International has a consensus target price of $29.5625, suggesting a potential downside of 29.23%. Given Wyndham Hotels & Resorts' stronger consensus rating and higher possible upside, research analysts plainly believe Wyndham Hotels & Resorts is more favorable than MGM Resorts International.
Summary
Wyndham Hotels & Resorts beats MGM Resorts International on 9 of the 16 factors compared between the two stocks.
