Marriott Vacations Worldwide (NYSE:VAC – Get Free Report) and Melco Resorts & Entertainment (NASDAQ:MLCO – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.
Profitability
This table compares Marriott Vacations Worldwide and Melco Resorts & Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Marriott Vacations Worldwide | -6.47% | 12.27% | 2.68% |
| Melco Resorts & Entertainment | 4.50% | -23.81% | 3.18% |
Valuation and Earnings
This table compares Marriott Vacations Worldwide and Melco Resorts & Entertainment”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Marriott Vacations Worldwide | $5.16 billion | 0.69 | -$308.00 million | ($9.74) | -10.62 |
| Melco Resorts & Entertainment | $5.16 billion | 0.37 | $185.04 million | $0.60 | 8.42 |
Melco Resorts & Entertainment has higher revenue and earnings than Marriott Vacations Worldwide. Marriott Vacations Worldwide is trading at a lower price-to-earnings ratio than Melco Resorts & Entertainment, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and price targets for Marriott Vacations Worldwide and Melco Resorts & Entertainment, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Marriott Vacations Worldwide | 3 | 2 | 7 | 1 | 2.46 |
| Melco Resorts & Entertainment | 2 | 2 | 5 | 1 | 2.50 |
Marriott Vacations Worldwide presently has a consensus price target of $106.27, indicating a potential upside of 2.78%. Melco Resorts & Entertainment has a consensus price target of $7.27, indicating a potential upside of 43.89%. Given Melco Resorts & Entertainment’s stronger consensus rating and higher probable upside, analysts clearly believe Melco Resorts & Entertainment is more favorable than Marriott Vacations Worldwide.
Institutional & Insider Ownership
89.5% of Marriott Vacations Worldwide shares are owned by institutional investors. Comparatively, 39.6% of Melco Resorts & Entertainment shares are owned by institutional investors. 13.3% of Marriott Vacations Worldwide shares are owned by company insiders. Comparatively, 57.1% of Melco Resorts & Entertainment shares are owned 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.
Volatility and Risk
Marriott Vacations Worldwide has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Melco Resorts & Entertainment has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.
Summary
Melco Resorts & Entertainment beats Marriott Vacations Worldwide on 9 of the 14 factors compared between the two stocks.
About Marriott Vacations Worldwide
Marriott Vacations Worldwide Corporation, a vacation company, develops, markets, sells, and manages vacation ownership and related businesses, products, and services in the United States and internationally. It operates through two segments, Vacation Ownership and Exchange & Third-Party Management. The company manages vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, Hyatt Vacation Club, and Marriott Vacation Club Pulse brands. It develops, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and holds right to develop, market, and sell ownership residential products under The Ritz-Carlton Residences brand. In addition, the company offers exchange networks and membership programs, as well as provision of management services to other resorts and lodging properties through Interval International, and Aqua-Aston business brands. Further, it provides financing consumer purchases of vacation ownership products, and renting vacation ownership inventory. The company sells its upscale tier vacation ownership products primarily through a network of resort-based sales centers and off-site sales locations. The company was founded in 1984 and is headquartered in Orlando, Florida.
About Melco Resorts & Entertainment
Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integrated casino resort that has 500 gaming tables and 800 gaming machines; approximately 1,400 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 30 restaurants and bars, and 150 retail outlets; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 112 gaming tables and 56 gaming machines; 230 hotel rooms; various fine dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 280 gaming tables and 980 gaming machines in Cotai, Macau. Further, the company owns and operates 7 Mocha Clubs with 1,034 gaming machines, as well as Taipa Square casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. Melco Resorts & Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong. As of February 16, 2017, Melco Resorts & Entertainment Limited operates as a subsidiary of Melco Leisure and Entertainment Group Limited.
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