Marcus (NYSE:MCS) vs. Marriott Vacations Worldwide (NYSE:VAC) Financial Contrast

Marcus (NYSE:MCS) and Marriott Vacations Worldwide (NYSE:VAC) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Marcus and Marriott Vacations Worldwide, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marcus	0	2	4	0	2.67
Marriott Vacations Worldwide	3	2	7	0	2.33

Marcus currently has a consensus price target of $23.33, suggesting a potential upside of 15.97%. Marriott Vacations Worldwide has a consensus price target of $83.70, suggesting a potential downside of 3.52%. Given Marcus’ stronger consensus rating and higher probable upside, research analysts clearly believe Marcus is more favorable than Marriott Vacations Worldwide.

Dividends

Marcus pays an annual dividend of $0.32 per share and has a dividend yield of 1.6%. Marriott Vacations Worldwide pays an annual dividend of $3.20 per share and has a dividend yield of 3.7%. Marcus pays out 74.4% of its earnings in the form of a dividend. Marriott Vacations Worldwide pays out -31.7% 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. Marcus has increased its dividend for 2 consecutive years and Marriott Vacations Worldwide has increased its dividend for 1 consecutive years. Marriott Vacations Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Marcus and Marriott Vacations Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marcus	1.85%	0.79%	0.35%
Marriott Vacations Worldwide	-6.72%	11.37%	2.58%

Insider and Institutional Ownership

81.6% of Marcus shares are held by institutional investors. Comparatively, 89.5% of Marriott Vacations Worldwide shares are held by institutional investors. 16.5% of Marcus shares are held by insiders. Comparatively, 13.3% of Marriott Vacations Worldwide shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Marcus has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Marriott Vacations Worldwide has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Earnings and Valuation

This table compares Marcus and Marriott Vacations Worldwide”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marcus	$758.46 million	0.82	$12.69 million	$0.43	46.79
Marriott Vacations Worldwide	$5.03 billion	0.59	-$308.00 million	($10.09)	-8.60

Marcus has higher earnings, but lower revenue than Marriott Vacations Worldwide. Marriott Vacations Worldwide is trading at a lower price-to-earnings ratio than Marcus, indicating that it is currently the more affordable of the two stocks.

Summary

Marcus beats Marriott Vacations Worldwide on 9 of the 17 factors compared between the two stocks.

About Marcus

The Marcus Corporation, together with its subsidiaries, owns and operates movie theatres, and hotels and resorts in the United States. It operates a family entertainment center and multiscreen motion picture theatres under the Big Screen Bistro, Big Screen Bistro Express, BistroPlex, and Movie Tavern by Marcus brand names. The company also owns and operates full-service hotels and resorts, as well as manages full-service hotels, resorts, and other properties. In addition, it provides hospitality management services, including check-in, housekeeping, and maintenance for a vacation ownership development; and manages condominium hotels under long-term management contracts. The Marcus Corporation was founded in 1935 and is headquartered in Milwaukee, Wisconsin.

About Marriott Vacations Worldwide

Marriott Vacations Worldwide Corporation, a vacation company, develops, markets, sells, and manages vacation ownership and related businesses, products, and services in the United States and internationally. It operates through two segments, Vacation Ownership and Exchange & Third-Party Management. The company manages vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, Hyatt Vacation Club, and Marriott Vacation Club Pulse brands. It develops, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and holds right to develop, market, and sell ownership residential products under The Ritz-Carlton Residences brand. In addition, the company offers exchange networks and membership programs, as well as provision of management services to other resorts and lodging properties through Interval International, and Aqua-Aston business brands. Further, it provides financing consumer purchases of vacation ownership products, and renting vacation ownership inventory. The company sells its upscale tier vacation ownership products primarily through a network of resort-based sales centers and off-site sales locations. The company was founded in 1984 and is headquartered in Orlando, Florida.