Analyzing Marriott Vacations Worldwide (NYSE:VAC) and Yum! Brands (NYSE:YUM)

Marriott Vacations Worldwide (NYSE:VAC) and Yum! Brands (NYSE:YUM) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Valuation & Earnings

This table compares Marriott Vacations Worldwide and Yum! Brands”s gross 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	0.77	-$308.00 million	($9.74)	-11.84
Yum! Brands	$8.21 billion	5.22	$1.56 billion	$7.95	19.76

Yum! Brands has higher revenue and earnings than Marriott Vacations Worldwide. Marriott Vacations Worldwide is trading at a lower price-to-earnings ratio than Yum! Brands, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Marriott Vacations Worldwide and Yum! Brands’ 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%
Yum! Brands	25.42%	-24.57%	22.24%

Insider and Institutional Ownership

89.5% of Marriott Vacations Worldwide shares are held by institutional investors. Comparatively, 82.4% of Yum! Brands shares are held by institutional investors. 13.3% of Marriott Vacations Worldwide shares are held by company insiders. Comparatively, 0.1% of Yum! Brands shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Marriott Vacations Worldwide pays an annual dividend of $3.20 per share and has a dividend yield of 2.8%. Yum! Brands pays an annual dividend of $3.00 per share and has a dividend yield of 1.9%. Marriott Vacations Worldwide pays out -32.9% of its earnings in the form of a dividend. Yum! Brands pays out 37.7% 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. Marriott Vacations Worldwide has increased its dividend for 1 consecutive years and Yum! Brands has increased its dividend for 8 consecutive years. Marriott Vacations Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings for Marriott Vacations Worldwide and Yum! Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marriott Vacations Worldwide	3	2	7	1	2.46
Yum! Brands	0	7	12	0	2.63

Marriott Vacations Worldwide currently has a consensus price target of $101.45, suggesting a potential downside of 12.05%. Yum! Brands has a consensus price target of $174.65, suggesting a potential upside of 11.17%. Given Yum! Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Yum! Brands is more favorable than Marriott Vacations Worldwide.

Volatility and Risk

Marriott Vacations Worldwide has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Yum! Brands has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Summary

Yum! Brands beats Marriott Vacations Worldwide on 11 of the 18 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 Yum! Brands

Yum! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. The company operates through the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division segments. It also operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, which specialize in chicken, pizza, made-to-order chargrilled burgers, sandwiches, Mexican-style food categories, and other food products. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to Yum! Brands, Inc. in May 2002. Yum! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.