Interval Leisure Group (ILG) versus Marriott Vacations Worldwide (VAC) Financial Analysis

Interval Leisure Group (NASDAQ: ILG) and Marriott Vacations Worldwide (NYSE:VAC) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Valuation and Earnings

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This table compares Interval Leisure Group and Marriott Vacations Worldwide’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Interval Leisure Group $1.79 billion 2.19 $168.00 million $1.10 28.66
Marriott Vacations Worldwide $1.95 billion 1.78 $226.77 million $5.78 22.69

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

Dividends

Interval Leisure Group pays an annual dividend of $0.70 per share and has a dividend yield of 2.2%. Marriott Vacations Worldwide pays an annual dividend of $1.60 per share and has a dividend yield of 1.2%. Interval Leisure Group pays out 63.6% of its earnings in the form of a dividend. Marriott Vacations Worldwide pays out 27.7% 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. Marriott Vacations Worldwide has increased its dividend for 3 consecutive years.

Volatility & Risk

Interval Leisure Group has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, Marriott Vacations Worldwide has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Interval Leisure Group and Marriott Vacations Worldwide, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Interval Leisure Group 0 1 6 0 2.86
Marriott Vacations Worldwide 0 3 6 0 2.67

Interval Leisure Group currently has a consensus target price of $32.83, indicating a potential upside of 4.13%. Marriott Vacations Worldwide has a consensus target price of $138.00, indicating a potential upside of 5.22%. Given Marriott Vacations Worldwide’s higher probable upside, analysts clearly believe Marriott Vacations Worldwide is more favorable than Interval Leisure Group.

Insider and Institutional Ownership

84.1% of Interval Leisure Group shares are held by institutional investors. Comparatively, 74.0% of Marriott Vacations Worldwide shares are held by institutional investors. 2.0% of Interval Leisure Group shares are held by company insiders. Comparatively, 3.3% of Marriott Vacations Worldwide shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Interval Leisure Group 9.35% 8.41% 3.95%
Marriott Vacations Worldwide 11.61% 16.46% 6.10%

Summary

Marriott Vacations Worldwide beats Interval Leisure Group on 10 of the 16 factors compared between the two stocks.

Interval Leisure Group Company Profile

ILG, Inc., together with its subsidiaries, provides professional vacation services in the United States and internationally. The company operates in two segments, Vacation Ownership (VO), and Exchange and Rental. The VO segment engages in the sale, marketing, financing, and development of vacation ownership interests; and management of vacation ownership resorts, as well as in the provision of related services to owners and homeowners' associations (HOAs). The Exchange and Rental segment offers access to vacation accommodations and other travel-related transactions and services to leisure travelers by providing vacation exchange and rental services. This segment also provides leisure and travel related products and services to owners of vacation interests and others primarily through various membership programs, as well as related services to resort developer clients and HOAs; and allows owners of vacation interests to exchange their occupancy rights for alternative accommodations at another resort and/or occupancy period. In addition, this segment offers vacation property rental services for condominium owners, hotel owners, and HOAs. As of December 31, 2017, it operated a total of 43 resorts within Vistana Signature Experiences and Hyatt Vacation Ownership businesses; and managed approximately 250 resorts, vacation ownership properties, and/or their associations. The company was formerly known as Interval Leisure Group, Inc. and changed its name to ILG, Inc. in October 2016. ILG, Inc. was founded in 1976 and is headquartered in Miami, Florida.

Marriott Vacations Worldwide Company Profile

Marriott Vacations Worldwide Corporation focuses on vacation ownership, based on number of owners, number of resorts and revenues. The Company is an exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Company operates through three segments North America, Europe and Asia Pacific. In the North America segment, it develops, markets, sells and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. Its Europe segment is engaged in selling its existing projects and managing existing resorts. Its Asia Pacific segment, it develops, markets, sells and manages two points-based programs that it designed to appeal to the vacation preferences of the market, Marriott Vacation Club, Asia Pacific and Marriott Vacation Club Destinations, Australia, as well as a weeks-based right-to-use product.

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