MGM Resorts International (NYSE:MGM) and Wyndham Destinations (NYSE:WYND) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.
Dividends
MGM Resorts International pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Wyndham Destinations pays an annual dividend of $1.20 per share and has a dividend yield of 1.9%. MGM Resorts International pays out 1.3% of its earnings in the form of a dividend. Wyndham Destinations pays out 21.4% 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. MGM Resorts International has raised its dividend for 1 consecutive years.
Institutional and Insider Ownership
63.4% of MGM Resorts International shares are owned by institutional investors. Comparatively, 90.3% of Wyndham Destinations shares are owned by institutional investors. 5.1% of MGM Resorts International shares are owned by company insiders. Comparatively, 1.6% of Wyndham Destinations shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares MGM Resorts International and Wyndham Destinations' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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MGM Resorts International | $12.90 billion | 1.60 | $2.05 billion | $0.77 | 54.25 |
Wyndham Destinations | $4.04 billion | 1.36 | $507 million | $5.62 | 11.41 |
MGM Resorts International has higher revenue and earnings than Wyndham Destinations. Wyndham Destinations 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 Recommendations
This is a summary of current recommendations and price targets for MGM Resorts International and Wyndham Destinations, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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MGM Resorts International | 3 | 11 | 5 | 0 | 2.11 |
Wyndham Destinations | 0 | 1 | 7 | 0 | 2.88 |
MGM Resorts International currently has a consensus price target of $29.5625, indicating a potential downside of 29.23%. Wyndham Destinations has a consensus price target of $45.30, indicating a potential downside of 29.33%. Given MGM Resorts International's higher possible upside, research analysts plainly believe MGM Resorts International is more favorable than Wyndham Destinations.
Risk and Volatility
MGM Resorts International has a beta of 2.42, meaning that its share price is 142% more volatile than the S&P 500. Comparatively, Wyndham Destinations has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500.
Profitability
This table compares MGM Resorts International and Wyndham Destinations' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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MGM Resorts International | 20.81% | -12.08% | -4.10% |
Wyndham Destinations | 0.13% | -13.97% | 1.40% |
Summary
MGM Resorts International beats Wyndham Destinations on 11 of the 17 factors compared between the two stocks.