Head-To-Head Analysis: Melco Resorts & Entertainment (NASDAQ:MLCO) and Marriott Vacations Worldwide (NYSE:VAC)

Marriott Vacations Worldwide (NYSE:VAC) and Melco Resorts & Entertainment (NASDAQ:MLCO) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Insider & Institutional Ownership

89.5% of Marriott Vacations Worldwide shares are held by institutional investors. Comparatively, 39.6% of Melco Resorts & Entertainment shares are held by institutional investors. 13.3% of Marriott Vacations Worldwide shares are held by insiders. Comparatively, 57.1% of Melco Resorts & Entertainment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marriott Vacations Worldwide	3	2	7	1	2.46
Melco Resorts & Entertainment	2	2	5	1	2.50

Marriott Vacations Worldwide presently has a consensus target price of $101.45, indicating a potential upside of 0.64%. Melco Resorts & Entertainment has a consensus target price of $7.27, indicating a potential upside of 43.61%. Given Melco Resorts & Entertainment’s stronger consensus rating and higher probable upside, analysts plainly believe Melco Resorts & Entertainment is more favorable than Marriott Vacations Worldwide.

Earnings and Valuation

This table compares Marriott Vacations Worldwide and Melco Resorts & Entertainment”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marriott Vacations Worldwide	$5.03 billion	0.69	-$308.00 million	($9.74)	-10.35
Melco Resorts & Entertainment	$5.16 billion	0.37	$185.04 million	$0.60	8.43

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

Profitability

This table compares Marriott Vacations Worldwide and Melco Resorts & Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marriott Vacations Worldwide	-6.47%	12.27%	2.68%
Melco Resorts & Entertainment	4.50%	-23.81%	3.18%

Risk & Volatility

Marriott Vacations Worldwide has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Melco Resorts & Entertainment has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Summary

Melco Resorts & Entertainment beats Marriott Vacations Worldwide on 9 of the 14 factors compared between the two stocks.

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.

About Melco Resorts & Entertainment

Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integrated casino resort that has 500 gaming tables and 800 gaming machines; approximately 1,400 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 30 restaurants and bars, and 150 retail outlets; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 112 gaming tables and 56 gaming machines; 230 hotel rooms; various fine dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 280 gaming tables and 980 gaming machines in Cotai, Macau. Further, the company owns and operates 7 Mocha Clubs with 1,034 gaming machines, as well as Taipa Square casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. Melco Resorts & Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong. As of February 16, 2017, Melco Resorts & Entertainment Limited operates as a subsidiary of Melco Leisure and Entertainment Group Limited.