Financial Analysis: The Star Entertainment Group (OTCMKTS:EHGRF) versus Hilton Worldwide (NYSE:HLT)

The Star Entertainment Group (OTCMKTS:EHGRF) and Hilton Worldwide (NYSE:HLT) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for The Star Entertainment Group and Hilton Worldwide, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Star Entertainment Group	0	0	0	0	0.00
Hilton Worldwide	0	7	16	1	2.75

Hilton Worldwide has a consensus target price of $353.82, indicating a potential upside of 8.28%. Given Hilton Worldwide’s stronger consensus rating and higher possible upside, analysts clearly believe Hilton Worldwide is more favorable than The Star Entertainment Group.

Institutional and Insider Ownership

23.3% of The Star Entertainment Group shares are owned by institutional investors. Comparatively, 95.9% of Hilton Worldwide shares are owned by institutional investors. 2.7% of Hilton Worldwide shares are owned by 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.

Earnings & Valuation

This table compares The Star Entertainment Group and Hilton Worldwide”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Star Entertainment Group	N/A	N/A	N/A	$0.13	1.09
Hilton Worldwide	$12.48 billion	5.89	$1.46 billion	$6.81	47.98

Hilton Worldwide has higher revenue and earnings than The Star Entertainment Group. The Star Entertainment Group is trading at a lower price-to-earnings ratio than Hilton Worldwide, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares The Star Entertainment Group and Hilton Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Star Entertainment Group	N/A	N/A	N/A
Hilton Worldwide	12.69%	-35.24%	11.84%

Dividends

The Star Entertainment Group pays an annual dividend of $0.02 per share and has a dividend yield of 14.3%. Hilton Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. The Star Entertainment Group pays out 15.5% of its earnings in the form of a dividend. Hilton Worldwide pays out 8.8% 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.

Summary

Hilton Worldwide beats The Star Entertainment Group on 12 of the 14 factors compared between the two stocks.

About The Star Entertainment Group

The Star Entertainment Group Limited operates and manages integrated resorts in Australia. It operates through three segments: Sydney, Gold Coast, and Brisbane. The company owns and operates The Star Sydney, The Star Gold Coast, and Treasury Brisbane casinos, which include hotels, restaurants, bars, theatres, and other entertainment facilities. It also manages the Gold Coast Convention and Exhibition Centre. The company was formerly known as Echo Entertainment Group Limited and changed its name to The Star Entertainment Group Limited in November 2015. The Star Entertainment Group Limited was incorporated in 2011 and is based in Brisbane, Australia.

About Hilton Worldwide

Hilton Worldwide Holdings Inc., a hospitality company, engages in managing, franchising, owning, and leasing hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. The company engages in the hotel management and licensing of its brands. It operates luxury hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, and Conrad Hotels & Resorts brand; lifestyle hotels under the Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton brand; full service hotels under the Signia by Hilton, Hilton Hotels & Resorts, and DoubleTree by Hilton brand; service hotels under the Hilton Garden Inn, Hampton by Hilton, and Tru by Hilton brand; all-suite hotels under the Embassy Suites by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton brand; and economy hotel under the Spark by Hilton brand, as well as Hilton Grand Vacations. The company operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. The company was founded in 1919 and is headquartered in McLean, Virginia.