Reviewing Chagee (NASDAQ:CHA) & GreenTree Hospitality Group (NYSE:GHG)

GreenTree Hospitality Group (NYSE:GHG) and Chagee (NASDAQ:CHA) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for GreenTree Hospitality Group and Chagee, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GreenTree Hospitality Group	1	0	0	0	1.00
Chagee	1	3	3	0	2.29

Chagee has a consensus target price of $14.00, suggesting a potential downside of 2.57%. Given Chagee’s stronger consensus rating and higher possible upside, analysts clearly believe Chagee is more favorable than GreenTree Hospitality Group.

Valuation and Earnings

This table compares GreenTree Hospitality Group and Chagee”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GreenTree Hospitality Group	$1.01 billion	0.10	$23.85 million	$0.05	20.30
Chagee	$13.14 billion	0.20	$167.47 million	$1.01	14.23

Chagee has higher revenue and earnings than GreenTree Hospitality Group. Chagee is trading at a lower price-to-earnings ratio than GreenTree Hospitality Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GreenTree Hospitality Group and Chagee’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GreenTree Hospitality Group	4.14%	2.49%	0.84%
Chagee	10.23%	16.43%	11.39%

Dividends

GreenTree Hospitality Group pays an annual dividend of $0.05 per share and has a dividend yield of 4.9%. Chagee pays an annual dividend of $0.87 per share and has a dividend yield of 6.1%. GreenTree Hospitality Group pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chagee pays out 86.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chagee is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

8.1% of GreenTree Hospitality Group shares are held by institutional investors. 88.7% of GreenTree Hospitality Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

GreenTree Hospitality Group has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Chagee has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Summary

Chagee beats GreenTree Hospitality Group on 13 of the 16 factors compared between the two stocks.

About GreenTree Hospitality Group

GreenTree Hospitality Group is a China-focused hotel operator and franchisor. The company develops and operates hotels through a mix of franchised, managed and leased arrangements, serving travelers across a range of lodging categories. Its portfolio includes brands such as GreenTree Inn, GreenTree Alliance, GreenTree Eastern, Vatica and Shell. The company also provides hotel management and related services to property owners and franchise partners. Founded in 2004, GreenTree Hospitality Group has built a network primarily across mainland China.

About Chagee

Chagee, also known as 霸王茶姬, is a China-based tea beverage company that develops and sells freshly prepared drinks made with tea. Its menu includes tea lattes and other milk tea and fruit tea beverages, with an emphasis on brewed tea and tea-forward flavors. Founded in 2017 by Zhang Junjie, who serves as the company’s chairman and chief executive officer, Chagee operates a network of branded teahouses. The company serves customers primarily in China and has expanded into selected Southeast Asian markets.