Comparing Hilton Grand Vacations (HGV) and Norwegian Cruise Line (NCLH)

Hilton Grand Vacations (NYSE: HGV) and Norwegian Cruise Line (NASDAQ:NCLH) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Hilton Grand Vacations and Norwegian Cruise Line, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hilton Grand Vacations 0 1 6 0 2.86
Norwegian Cruise Line 1 3 12 0 2.69

Hilton Grand Vacations currently has a consensus target price of $46.50, suggesting a potential upside of 16.60%. Norwegian Cruise Line has a consensus target price of $64.77, suggesting a potential upside of 19.65%. Given Norwegian Cruise Line’s higher possible upside, analysts clearly believe Norwegian Cruise Line is more favorable than Hilton Grand Vacations.

Volatility and Risk

Hilton Grand Vacations has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Norwegian Cruise Line has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Earnings and Valuation

This table compares Hilton Grand Vacations and Norwegian Cruise Line’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hilton Grand Vacations $1.71 billion 2.26 $327.00 million $1.97 20.24
Norwegian Cruise Line $4.87 billion 2.50 $633.08 million N/A N/A

Norwegian Cruise Line has higher revenue and earnings than Hilton Grand Vacations.

Profitability

This table compares Hilton Grand Vacations and Norwegian Cruise Line’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hilton Grand Vacations 18.28% 45.63% 7.46%
Norwegian Cruise Line 13.91% 16.97% 6.16%

Insider & Institutional Ownership

88.9% of Norwegian Cruise Line shares are held by institutional investors. 0.7% of Hilton Grand Vacations shares are held by insiders. Comparatively, 1.0% of Norwegian Cruise Line shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Norwegian Cruise Line beats Hilton Grand Vacations on 8 of the 12 factors compared between the two stocks.

About Hilton Grand Vacations

Hilton Grand Vacations Inc., a timeshare company, develops, markets, sells, and manages timeshare resorts primarily under the Hilton Grand Vacations brand. The company operates in two segments, Real Estate Sales and Financing; and Resort Operations and Club Management. It sells vacation ownership intervals; manages resorts; operates a points-based vacation club; and finances and services loans provided to consumers for their timeshare purchases. The company also manages and operates the points-based Hilton Grand Vacations Club and Hilton Club exchange programs, which provides exchange, leisure travel, and reservation services to approximately 288,000 members, as well as engages in the rental of inventory made available due to ownership exchanges through its club programs. As of December 31, 2017, it had 48 resorts comprising 8,102 units located in the United States and Europe. Hilton Grand Vacations Inc. was founded in 1992 and is headquartered in Orlando, Florida.

About Norwegian Cruise Line

Norwegian Cruise Line Holdings Ltd. (NCLH) is a global cruise company. The Company operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. The Company had 25 ships with approximately 50,400 Berths, as of May 1, 2017. The Company’s brands offer itineraries to various destinations around the world, including Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, Caribbean, Alaska and Hawaii. The Company’s brands offer various features, amenities, and activities, including various accommodations, multiple dining venues, bars and lounges, spa, casino and retail shopping areas and various entertainment choices. All the brands offer a selection of shore excursions at each port of call, as well as hotel packages for stays before or after a voyage. As of December 31, 2016, its Norwegian offered 14 ships that were purpose-built to deliver the Freestyle Cruising product, which offered freedom, flexibility and choice to its guests.

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