Financial Analysis: La Quinta (LQ) and Caesars Entertainment (CZR)

La Quinta (NYSE:LQ) and Caesars Entertainment (NASDAQ:CZR) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Analyst Ratings

This is a summary of current ratings and target prices for La Quinta and Caesars Entertainment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
La Quinta 0 4 2 0 2.33
Caesars Entertainment 1 2 7 0 2.60

La Quinta currently has a consensus price target of $29.00, indicating a potential upside of 34.14%. Caesars Entertainment has a consensus price target of $13.00, indicating a potential upside of 34.58%. Given Caesars Entertainment’s stronger consensus rating and higher probable upside, analysts plainly believe Caesars Entertainment is more favorable than La Quinta.

Institutional and Insider Ownership

98.7% of La Quinta shares are held by institutional investors. 1.6% of La Quinta shares are held by insiders. Comparatively, 0.9% of Caesars Entertainment shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares La Quinta and Caesars Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
La Quinta N/A N/A N/A
Caesars Entertainment 25.75% 2.23% 0.29%

Earnings and Valuation

This table compares La Quinta and Caesars Entertainment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
La Quinta N/A N/A N/A N/A N/A
Caesars Entertainment $4.85 billion 1.38 -$375.00 million ($3.37) -2.87

La Quinta has higher earnings, but lower revenue than Caesars Entertainment.

Summary

Caesars Entertainment beats La Quinta on 7 of the 9 factors compared between the two stocks.

About La Quinta

La Quinta Holdings Inc. owns, operates, and franchises select-service hotels. As of December 31, 2017, the company had 902 hotels, which included 317 owned and operated, as well as 585 franchised hotels with approximately 88,400 rooms under the La Quinta Inn, La Quinta Inn & Suites, and LQ Hotel trademarks primarily in 48 states of the United States, as well as in Canada, Mexico, Honduras, and Colombia. It serves the upper-midscale and midscale segments, principally under the La Quinta brand. La Quinta Holdings Inc. was founded in 1968 and is headquartered in Irving, Texas.

About Caesars Entertainment

Caesars Entertainment Corporation, through its subsidiaries, provides casino-entertainment and hospitality services in the United States and internationally. The company operates 36,000 slot machines and 2,700 table games, as well as other games comprising keno, poker, and race and sports books; and buffets, restaurants, bars, nightclubs, and lounges located throughout its casinos, as well as banquets and room service. As of March 7, 2018, it owned and operated 47 casinos. It also provides various retail and entertainment offerings in its casinos, as well as The LINQ promenade, an open-air dining, entertainment, and retail development; and operates various entertainment venues, including the Colosseum at Caesars Palace and Zappos Theater at Planet Hollywood. In addition, the company operates online gaming business that provides real money games; and owns the World Series of Poker tournaments and brand. The company was formerly known as Harrah's Entertainment Inc. and changed its name to Caesars Entertainment Corporation in November 2010. Caesars Entertainment Corporation was founded in 1937 and is based in Las Vegas, Nevada.

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