Choice Hotels International (NYSE:CHH – Get Free Report) and ONE Group Hospitality (NASDAQ:STKS – Get Free Report) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.
Risk & Volatility
Choice Hotels International has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, ONE Group Hospitality has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.
Insider and Institutional Ownership
65.6% of Choice Hotels International shares are owned by institutional investors. Comparatively, 29.1% of ONE Group Hospitality shares are owned by institutional investors. 23.9% of Choice Hotels International shares are owned by insiders. Comparatively, 25.7% of ONE Group Hospitality shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Choice Hotels International and ONE Group Hospitality”s 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 | 3.35 | $369.95 million | $7.08 | 16.79 |
| ONE Group Hospitality | $805.72 million | 0.05 | -$92.24 million | ($3.80) | -0.31 |
Choice Hotels International has higher revenue and earnings than ONE Group Hospitality. ONE Group Hospitality 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 ONE Group Hospitality’s 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% |
| ONE Group Hospitality | -10.25% | -10.49% | -0.62% |
Analyst Recommendations
This is a summary of current ratings for Choice Hotels International and ONE Group Hospitality, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Choice Hotels International | 3 | 9 | 3 | 0 | 2.00 |
| ONE Group Hospitality | 1 | 2 | 1 | 0 | 2.00 |
Choice Hotels International presently has a consensus target price of $113.69, indicating a potential downside of 4.34%. ONE Group Hospitality has a consensus target price of $4.00, indicating a potential upside of 238.98%. Given ONE Group Hospitality’s higher possible upside, analysts plainly believe ONE Group Hospitality is more favorable than Choice Hotels International.
Summary
Choice Hotels International beats ONE Group Hospitality on 9 of the 12 factors compared between the two stocks.
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.
About ONE Group Hospitality
The ONE Group Hospitality, Inc., a restaurant company, develops, owns, operates, manages, and licenses restaurants and lounges worldwide. It operates through STK, Kona Grill, and ONE Hospitality segments. The company also provides turn-key food and beverage services for hospitality venues, including hotels, casinos, and other locations. Its hospitality food and beverage solutions include developing, managing, and operating restaurants, bars, rooftops, pools, banqueting, catering, private dining rooms, room service, and mini bars; and offers hospitality advisory and consulting services. The company operates restaurants primarily under the STK and Kona Grill brands. The ONE Group Hospitality, Inc. was founded in 2004 and is based in Denver, Colorado.
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