Hilton Worldwide (HLT) versus Penn National Gaming (PENN) Financial Survey

Hilton Worldwide (NYSE: HLT) and Penn National Gaming (NASDAQ:PENN) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Institutional and Insider Ownership

97.5% of Hilton Worldwide shares are held by institutional investors. Comparatively, 99.1% of Penn National Gaming shares are held by institutional investors. 1.7% of Hilton Worldwide shares are held by company insiders. Comparatively, 10.6% of Penn National Gaming shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Hilton Worldwide and Penn National Gaming’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hilton Worldwide 14.87% 41.44% 4.93%
Penn National Gaming 17.04% -92.84% 1.61%

Analyst Recommendations

This is a summary of recent ratings and price targets for Hilton Worldwide and Penn National Gaming, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hilton Worldwide 0 7 9 1 2.65
Penn National Gaming 0 2 7 0 2.78

Hilton Worldwide presently has a consensus target price of $82.94, suggesting a potential downside of 1.07%. Penn National Gaming has a consensus target price of $32.75, suggesting a potential downside of 6.03%. Given Hilton Worldwide’s higher probable upside, research analysts plainly believe Hilton Worldwide is more favorable than Penn National Gaming.

Valuation & Earnings

This table compares Hilton Worldwide and Penn National Gaming’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hilton Worldwide $9.14 billion 2.76 $1.26 billion $2.00 41.92
Penn National Gaming $3.15 billion 1.02 $473.46 million $8.98 3.88

Hilton Worldwide has higher revenue and earnings than Penn National Gaming. Penn National Gaming is trading at a lower price-to-earnings ratio than Hilton Worldwide, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Hilton Worldwide has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Penn National Gaming has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Dividends

Hilton Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 0.7%. Penn National Gaming does not pay a dividend. Hilton Worldwide pays out 30.0% of its earnings in the form of a dividend. Hilton Worldwide has raised its dividend for 2 consecutive years.

Summary

Hilton Worldwide beats Penn National Gaming on 11 of the 18 factors compared between the two stocks.

Hilton Worldwide Company Profile

Hilton Worldwide Holdings Inc., a hospitality company, owns, leases, manages, develops, and franchises hotels and resorts. It operates through two segments, Management and Franchise; and Ownership. The company engages in the hotel management and licensing of its brands to franchisees. It operates hotels under the Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Hilton Hotels & Resorts, Curio – A Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton, Tapestry Collection by Hilton, and Hilton Grand Vacations brands. The company operates in North America, South America, and Central America, including all Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. As of February 28, 2018, it had approximately 5,200 properties with 856,000 rooms in 105 countries and territories. Hilton Worldwide Holdings Inc. was founded in 1919 and is headquartered in McLean, Virginia.

Penn National Gaming Company Profile

Penn National Gaming, Inc. owns and manages gaming and racing facilities, and operates video gaming terminals with a focus on slot machine entertainment. The company operates through Northeast, South/West, and Midwest segments. As of December 31, 2017, it operated 27 facilities in 17 jurisdictions, including California, Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario, Canada. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.

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