Head-To-Head Review: Hilton Hotels (NYSE:HLT) and Park Hotels & Resorts (PK)

Hilton Hotels (NYSE:HLT) and Park Hotels & Resorts (NYSE:PK) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Dividends

Hilton Hotels pays an annual dividend of $0.60 per share and has a dividend yield of 0.8%. Park Hotels & Resorts pays an annual dividend of $1.72 per share and has a dividend yield of 5.5%. Hilton Hotels pays out 30.0% of its earnings in the form of a dividend. Park Hotels & Resorts pays out 61.9% 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. Hilton Hotels has raised its dividend for 2 consecutive years.

Institutional and Insider Ownership

97.8% of Hilton Hotels shares are owned by institutional investors. 1.7% of Hilton Hotels shares are owned by insiders. Comparatively, 0.4% of Park Hotels & Resorts shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Hilton Hotels and Park Hotels & Resorts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hilton Hotels 0 8 9 1 2.61
Park Hotels & Resorts 2 5 4 0 2.18

Hilton Hotels currently has a consensus target price of $86.63, suggesting a potential upside of 15.58%. Park Hotels & Resorts has a consensus target price of $30.94, suggesting a potential downside of 1.91%. Given Hilton Hotels’ stronger consensus rating and higher possible upside, research analysts plainly believe Hilton Hotels is more favorable than Park Hotels & Resorts.

Profitability

This table compares Hilton Hotels and Park Hotels & Resorts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hilton Hotels 15.53% 50.91% 5.23%
Park Hotels & Resorts 19.08% 8.41% 5.15%

Volatility and Risk

Hilton Hotels has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Park Hotels & Resorts has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Earnings and Valuation

This table compares Hilton Hotels and Park Hotels & Resorts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hilton Hotels $9.14 billion 2.45 $1.26 billion $2.00 37.48
Park Hotels & Resorts $2.79 billion 2.27 $2.63 billion $2.78 11.35

Park Hotels & Resorts has lower revenue, but higher earnings than Hilton Hotels. Park Hotels & Resorts is trading at a lower price-to-earnings ratio than Hilton Hotels, indicating that it is currently the more affordable of the two stocks.

Summary

Hilton Hotels beats Park Hotels & Resorts on 14 of the 18 factors compared between the two stocks.

About Hilton Hotels

Hilton Worldwide Holdings Inc., a hospitality company, owns, leases, manages, develops, and franchises hotels and resorts. It operates through two segments, Management and Franchise; and Ownership. The company engages in the hotel management and licensing of its brands to franchisees. It operates hotels under the Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Hilton Hotels & Resorts, Curio – A Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton, Tapestry Collection by Hilton, and Hilton Grand Vacations brands. The company operates in North America, South America, and Central America, including all Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. As of September 24, 2018, it had approximately 5,400 properties with approximately 880,000 rooms in 106 countries and territories. Hilton Worldwide Holdings Inc. was founded in 1919 and is headquartered in McLean, Virginia.

About Park Hotels & Resorts

Park is a leading lodging REIT with a diverse portfolio of hotels and resorts with significant underlying real estate value. Park's portfolio consists of 54 premium-branded hotels and resorts with over 32,000 rooms, a majority of which are located in prime United States markets with high barriers to entry.

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