Choice Hotels International (CHH) vs. Its Peers Critical Comparison

Choice Hotels International (NYSE:CHH) is one of 382 publicly-traded companies in the “Hotels, Restaurants & Leisure” industry, but how does it compare to its peers? We will compare Choice Hotels International to similar companies based on the strength of its valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Dividends

Choice Hotels International pays an annual dividend of $1.15 per share and has a dividend yield of 1.0%. Choice Hotels International pays out 16.2% of its earnings in the form of a dividend. As a group, “Hotels, Restaurants & Leisure” companies pay a dividend yield of 3.2% and pay out 37.1% of their earnings in the form of a dividend.

Valuation & Earnings

This table compares Choice Hotels International and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Choice Hotels International	$1.60 billion	$369.95 million	16.79
Choice Hotels International Competitors	$3.31 billion	$250.20 million	-155.87

Choice Hotels International’s peers have higher revenue, but lower earnings than Choice Hotels International. Choice Hotels International is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings and target prices for Choice Hotels International and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Choice Hotels International	3	9	3	0	2.00
Choice Hotels International Competitors	3793	17214	25483	901	2.50

Choice Hotels International presently has a consensus price target of $113.69, suggesting a potential downside of 4.34%. As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 59.10%. Given Choice Hotels International’s peers stronger consensus rating and higher probable upside, analysts clearly believe Choice Hotels International has less favorable growth aspects than its peers.

Institutional & Insider Ownership

65.6% of Choice Hotels International shares are held by institutional investors. Comparatively, 48.6% of shares of all “Hotels, Restaurants & Leisure” companies are held by institutional investors. 23.9% of Choice Hotels International shares are held by company insiders. Comparatively, 22.1% of shares of all “Hotels, Restaurants & Leisure” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Choice Hotels International has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Choice Hotels International’s peers have a beta of 1.41, suggesting that their average stock price is 41% more volatile than the S&P 500.

Profitability

This table compares Choice Hotels International and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Choice Hotels International	12.65%	216.71%	10.71%
Choice Hotels International Competitors	2.32%	-40.06%	2.12%

Summary

Choice Hotels International beats its peers on 8 of the 15 factors compared.

About Choice Hotels International

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor in the United States and internationally. It operates through Hotel Franchising & Management and Corporate & Other segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Ascend Hotel Collection, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Studios, WoodSpring Suites, Everhome Suites, Cambria Hotels, Radisson Blu, Radisson RED, Radisson, Park Plaza, Country Inn & Suites by Radisson, Radisson Inn & Suites, Park Inn by Radisson, Radisson Individuals, and Radisson Collection. Choice Hotels International, Inc. was founded in 1939 and is headquartered in North Bethesda, Maryland.