Analyzing Hilton Worldwide Holdings (HLT) and Hilton Grand Vacations (HGV)

Hilton Grand Vacations (NYSE: HGV) and Hilton Worldwide Holdings (NYSE:HLT) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitabiliy and analyst recommendations.

Profitability

This table compares Hilton Grand Vacations and Hilton Worldwide Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hilton Grand Vacations N/A N/A N/A
Hilton Worldwide Holdings 1.02% 16.50% 3.63%

Valuation and Earnings

This table compares Hilton Grand Vacations and Hilton Worldwide Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hilton Grand Vacations $1.48 billion 2.50 $376.00 million N/A N/A
Hilton Worldwide Holdings $7.30 billion 3.01 $2.64 billion $0.34 196.51

Hilton Worldwide Holdings has higher revenue and earnings than Hilton Grand Vacations.

Analyst Ratings

This is a breakdown of current ratings for Hilton Grand Vacations and Hilton Worldwide Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hilton Grand Vacations 0 0 8 0 3.00
Hilton Worldwide Holdings 2 4 13 0 2.58

Hilton Grand Vacations presently has a consensus price target of $36.88, suggesting a potential downside of 1.22%. Hilton Worldwide Holdings has a consensus price target of $72.43, suggesting a potential upside of 8.36%. Given Hilton Worldwide Holdings’ higher probable upside, analysts plainly believe Hilton Worldwide Holdings is more favorable than Hilton Grand Vacations.

Insider and Institutional Ownership

95.6% of Hilton Grand Vacations shares are owned by institutional investors. 0.5% of Hilton Grand Vacations shares are owned by company insiders. Comparatively, 1.5% of Hilton Worldwide Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Hilton Worldwide Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. Hilton Grand Vacations does not pay a dividend. Hilton Worldwide Holdings pays out 176.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Hilton Worldwide Holdings beats Hilton Grand Vacations on 10 of the 13 factors compared between the two stocks.

Hilton Grand Vacations Company Profile

Hilton Grand Vacations Inc. is a timeshare company that markets and sells vacation ownership intervals (VOIs), manages resorts in leisure and urban destinations, and operates a points-based vacation club. The Company operates its business across two segments: Real Estate Sales and Financing, and Resort Operations and Club Management. As of September 30, 2016, the Company had 46 resorts, representing 7,592 units, and approximately 265,000 Hilton Grand Vacations Club (the Club) members. Club members can exchange their Club points for stays at any resort or any property in the Hilton system of various brands across over 4,700 properties, as well as various vacation options, such as cruises and guided tours. VOI product allows customers to purchase a lifetime of vacations. The Company offers amenities, such as full kitchens, in-unit washers and dryers, spas and kids’ clubs along with beach-front locations.

Hilton Worldwide Holdings Company Profile

Hilton Worldwide Holdings Inc. is a hospitality company. The Company is engaged in owning, leasing, managing and franchising hotels and resorts. The Company’s segments include ownership, and management and franchise. Its global portfolio of owned and leased properties includes a range of hotels in gateway cities, such as New York City, London, San Francisco, Chicago, Sao Paolo and Tokyo. The Company’s management and franchise segment manages hotels and licenses its brands to franchisees. Its brand portfolio includes Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio-A Collection by Hilton, DoubleTree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton. As of December 31, 2016, the Company owned, leased, managed or franchised 4,875 hotel and resort properties, totaling 796,440 rooms in 104 countries and territories.

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