Analyzing 7 DAYS GROUP (NYSE:SVN) & Choice Hotels International (CHH)

7 DAYS GROUP (NYSE: SVN) and Choice Hotels International (NYSE:CHH) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Insider & Institutional Ownership

50.8% of Choice Hotels International shares are held by institutional investors. 22.0% of Choice Hotels International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares 7 DAYS GROUP and Choice Hotels International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
7 DAYS GROUP N/A N/A N/A $0.53 N/A
Choice Hotels International $924.64 million 4.66 $139.37 million $2.70 28.22

Choice Hotels International has higher revenue and earnings than 7 DAYS GROUP. 7 DAYS GROUP 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.

Dividends

Choice Hotels International pays an annual dividend of $0.86 per share and has a dividend yield of 1.1%. 7 DAYS GROUP does not pay a dividend. Choice Hotels International pays out 31.9% of its earnings in the form of a dividend. Choice Hotels International has raised its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for 7 DAYS GROUP and Choice Hotels International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
7 DAYS GROUP 0 0 0 0 N/A
Choice Hotels International 2 4 0 0 1.67

Choice Hotels International has a consensus price target of $67.33, suggesting a potential downside of 11.64%.

Profitability

This table compares 7 DAYS GROUP and Choice Hotels International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
7 DAYS GROUP N/A N/A N/A
Choice Hotels International 15.66% -60.41% 17.42%

Summary

Choice Hotels International beats 7 DAYS GROUP on 8 of the 10 factors compared between the two stocks.

7 DAYS GROUP Company Profile

7 Days Group Holdings Limited (7 Days Inn) is an offshore holding company structure and conducts its operations in the People’s Republic of China through its wholly owned subsidiary, 7 Days Inn (Shenzhen) Co., Ltd. (7 Days Shenzhen), and its subsidiaries and branches. The Company converts and operates limited service economy hotels across metropolitan areas in the People’s Republic of China. It offers accommodations and services. As of December 31, 2010, it had 568 hotels in operation, 247 of which were managed hotels, with 56,410 hotel rooms in 89 cities, and an additional 197 hotels with 19,345 hotel rooms under conversion. As of December 31, 2010, approximately 16.5 million members were registered with its 7 Days Club. In December 2011, the Company acquired Hunan Huatian Star Hotel Management Limited.

Choice Hotels International Company Profile

Choice Hotels International, Inc. is a hotel franchisor. The Company’s segments include Hotel Franchising, SkyTouch Technology and Corporate & Other. It franchises lodging properties under brand names, including Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. The Company had 6,514 hotels open and 775 hotels under construction, awaiting conversion or approved for development, as of December 31, 2016, representing 516,122 rooms open and 62,547 rooms under construction, awaiting conversion or approved for development in 50 states, the District of Columbia and over 40 countries and territories outside the United States. Its domestic franchising operations are conducted through direct franchising relationships, while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships.

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