Financial Comparison: Full House Resorts (FLL) versus Choice Hotels (CHH)

Full House Resorts (NASDAQ: FLL) and Choice Hotels (NYSE:CHH) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, institutional ownership, profitability, risk and dividends.

Institutional & Insider Ownership

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39.3% of Full House Resorts shares are owned by institutional investors. Comparatively, 51.5% of Choice Hotels shares are owned by institutional investors. 16.6% of Full House Resorts shares are owned by company insiders. Comparatively, 22.0% of Choice Hotels shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Full House Resorts and Choice Hotels’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Full House Resorts $161.27 million 0.45 -$5.02 million ($0.23) -13.87
Choice Hotels $1.01 billion 4.52 $114.89 million $2.03 39.38

Choice Hotels has higher revenue and earnings than Full House Resorts. Full House Resorts is trading at a lower price-to-earnings ratio than Choice Hotels, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Full House Resorts and Choice Hotels’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Full House Resorts -3.12% -9.22% -2.87%
Choice Hotels 11.40% -68.40% 17.51%

Risk and Volatility

Full House Resorts has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, Choice Hotels has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Dividends

Choice Hotels pays an annual dividend of $0.86 per share and has a dividend yield of 1.1%. Full House Resorts does not pay a dividend. Choice Hotels pays out 42.4% of its earnings in the form of a dividend. Full House Resorts has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Full House Resorts and Choice Hotels, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Full House Resorts 0 0 2 0 3.00
Choice Hotels 2 5 0 0 1.71

Full House Resorts presently has a consensus target price of $3.88, indicating a potential upside of 21.47%. Choice Hotels has a consensus target price of $75.29, indicating a potential downside of 5.83%. Given Full House Resorts’ stronger consensus rating and higher possible upside, research analysts plainly believe Full House Resorts is more favorable than Choice Hotels.

Summary

Choice Hotels beats Full House Resorts on 11 of the 17 factors compared between the two stocks.

About Full House Resorts

Full House Resorts, Inc. owns, operates, develops, manages, and/or invests in casinos and related hospitality and entertainment facilities. The Company’s casino/resort segments include the Silver Slipper Casino & Hotel in Hancock County, Mississippi; the Rising Star Casino Resort in Rising Sun, Indiana, and the Northern Nevada segment, which consists of the Grand Lodge Casino in Incline Village, Nevada and Stockman’s Casino in Fallon, Nevada. The Company’s Development/Management segment includes costs associated with casino-related development and management projects. The Company has a leased property, Grand Lodge Casino. The Rising Star Casino Resort is located on the banks of the Ohio River in Rising Sun, Indiana. The Silver Slipper Casino & Hotel is situated on the far west end of the Mississippi Gulf Coast in Bay St. Louis, Mississippi. The Grand Lodge Casino is located within Hyatt Regency in Incline Village, Nevada on the north shore of Lake Tahoe.

About Choice Hotels

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. It operates through Hotel Franchising and SkyTouch Technology segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. It also develops and markets cloud-based technology products to the hotel industry, including inventory management, pricing, and connectivity to third party channels and hoteliers; and provides onsite and remote installation, training, and phone support services. As of March 5, 2018, the company franchised approximately 6,800 hotels comprising 500,000 rooms. Choice Hotels International, Inc. was founded in 1939 and is based in Rockville, Maryland.

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