La Quinta (LQ) & Caesars Entertainment (CZR) Head-To-Head Survey

La Quinta (NYSE:LQ) and Caesars Entertainment (NASDAQ:CZR) are both mid-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, risk, valuation, earnings, profitability and institutional ownership.

Volatility and Risk

La Quinta has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500. Comparatively, Caesars Entertainment has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Profitability

This table compares La Quinta and Caesars Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
La Quinta 13.87% 3.13% 0.80%
Caesars Entertainment 21.90% -4.71% -0.32%

Insider and Institutional Ownership

98.7% of La Quinta shares are held by institutional investors. 1.6% of La Quinta shares are held by insiders. Comparatively, 0.9% of Caesars Entertainment shares are held by 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.

Valuation & Earnings

This table compares La Quinta and Caesars Entertainment’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
La Quinta $980.63 million 2.59 $151.96 million $0.29 74.55
Caesars Entertainment $4.85 billion 1.39 -$375.00 million ($3.37) -2.88

La Quinta has higher earnings, but lower revenue than Caesars Entertainment. Caesars Entertainment is trading at a lower price-to-earnings ratio than La Quinta, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for La Quinta and Caesars Entertainment, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
La Quinta 0 4 2 0 2.33
Caesars Entertainment 1 2 6 0 2.56

La Quinta presently has a consensus target price of $29.00, indicating a potential upside of 34.14%. Caesars Entertainment has a consensus target price of $13.38, indicating a potential upside of 37.89%. Given Caesars Entertainment’s stronger consensus rating and higher possible upside, analysts plainly believe Caesars Entertainment is more favorable than La Quinta.

Summary

La Quinta beats Caesars Entertainment on 9 of the 14 factors compared between the two stocks.

La Quinta Company Profile

La Quinta Holdings Inc. owns, operates, and franchises select-service hotels. As of December 31, 2017, the company had 902 hotels, which included 317 owned and operated, as well as 585 franchised hotels with approximately 88,400 rooms under the La Quinta Inn, La Quinta Inn & Suites, and LQ Hotel trademarks primarily in 48 states of the United States, as well as in Canada, Mexico, Honduras, and Colombia. It serves the upper-midscale and midscale segments, principally under the La Quinta brand. La Quinta Holdings Inc. was founded in 1968 and is headquartered in Irving, Texas.

Caesars Entertainment Company Profile

Caesars Entertainment Corporation, through its subsidiaries, provides casino-entertainment and hospitality services in the United States and internationally. The company operates 36,000 slot machines and 2,700 table games, as well as other games comprising keno, poker, and race and sports books; and buffets, restaurants, bars, nightclubs, and lounges located throughout its casinos, as well as banquets and room service. As of March 7, 2018, it owned and operated 47 casinos. It also provides various retail and entertainment offerings in its casinos, as well as The LINQ promenade, an open-air dining, entertainment, and retail development; and operates various entertainment venues, including the Colosseum at Caesars Palace and Zappos Theater at Planet Hollywood. In addition, the company operates online gaming business that provides real money games; and owns the World Series of Poker tournaments and brand. The company was formerly known as Harrah's Entertainment Inc. and changed its name to Caesars Entertainment Corporation in November 2010. Caesars Entertainment Corporation was founded in 1937 and is based in Las Vegas, Nevada.

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