Critical Survey: Choice Hotels International (NYSE:CHH) & Red Robin Gourmet Burgers (NASDAQ:RRGB)

Choice Hotels International (NYSE:CHH – Get Free Report) and Red Robin Gourmet Burgers (NASDAQ:RRGB – Get Free Report) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Institutional & Insider Ownership

65.6% of Choice Hotels International shares are owned by institutional investors. Comparatively, 84.0% of Red Robin Gourmet Burgers shares are owned by institutional investors. 23.9% of Choice Hotels International shares are owned by company insiders. Comparatively, 4.1% of Red Robin Gourmet Burgers shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Choice Hotels International and Red Robin Gourmet Burgers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Choice Hotels International 3 9 2 0 1.93
Red Robin Gourmet Burgers 1 1 2 0 2.25

Choice Hotels International currently has a consensus price target of $112.67, suggesting a potential upside of 11.24%. Red Robin Gourmet Burgers has a consensus price target of $8.33, suggesting a potential upside of 11.41%. Given Red Robin Gourmet Burgers’ stronger consensus rating and higher possible upside, analysts plainly believe Red Robin Gourmet Burgers is more favorable than Choice Hotels International.

Risk & Volatility

Choice Hotels International has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 2.44, indicating that its share price is 144% more volatile than the S&P 500.

Valuation & Earnings

This table compares Choice Hotels International and Red Robin Gourmet Burgers”s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Choice Hotels International $1.60 billion 2.86 $369.95 million $7.08 14.31
Red Robin Gourmet Burgers $1.21 billion 0.12 -$23.28 million ($1.69) -4.43

Choice Hotels International has higher revenue and earnings than Red Robin Gourmet Burgers. Red Robin Gourmet Burgers is trading at a lower price-to-earnings ratio than Choice Hotels International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Choice Hotels International and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Choice Hotels International 20.28% 205.69% 10.68%
Red Robin Gourmet Burgers -2.55% N/A -2.65%

Summary

Choice Hotels International beats Red Robin Gourmet Burgers on 9 of the 13 factors compared between the two stocks.

About Choice Hotels International

(Get Free Report)

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.

About Red Robin Gourmet Burgers

(Get Free Report)

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises casual-dining restaurants, in North America and one Canadian province. Its restaurants primarily offer burgers and pizza, appetizers, salads, soups, other entrees, desserts, wings, milkshakes, alcoholic and non-alcoholic specialty drinks, cocktails, wine, and beers. The company was founded in 1969 and is based in Englewood, Colorado.

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