MGM Resorts International (NYSE: MGM) and Xenia Hotels & Resorts (NYSE:XHR) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.
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This is a breakdown of recent recommendations and price targets for MGM Resorts International and Xenia Hotels & Resorts, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MGM Resorts International||0||3||10||0||2.77|
|Xenia Hotels & Resorts||0||2||3||0||2.60|
MGM Resorts International presently has a consensus target price of $38.08, indicating a potential upside of 17.99%. Xenia Hotels & Resorts has a consensus target price of $21.60, indicating a potential downside of 7.77%. Given MGM Resorts International’s stronger consensus rating and higher possible upside, equities analysts plainly believe MGM Resorts International is more favorable than Xenia Hotels & Resorts.
This table compares MGM Resorts International and Xenia Hotels & Resorts’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MGM Resorts International||17.88%||5.45%||2.05%|
|Xenia Hotels & Resorts||14.77%||8.80%||4.78%|
Institutional & Insider Ownership
83.9% of MGM Resorts International shares are owned by institutional investors. Comparatively, 73.0% of Xenia Hotels & Resorts shares are owned by institutional investors. 12.2% of MGM Resorts International shares are owned by insiders. Comparatively, 0.9% of Xenia Hotels & Resorts shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares MGM Resorts International and Xenia Hotels & Resorts’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MGM Resorts International||$10.77 billion||1.68||$1.96 billion||$1.02||31.85|
|Xenia Hotels & Resorts||$945.28 million||2.65||$98.86 million||$2.06||11.37|
MGM Resorts International has higher revenue and earnings than Xenia Hotels & Resorts. Xenia Hotels & Resorts is trading at a lower price-to-earnings ratio than MGM Resorts International, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
MGM Resorts International has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Xenia Hotels & Resorts has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.
MGM Resorts International pays an annual dividend of $0.48 per share and has a dividend yield of 1.5%. Xenia Hotels & Resorts pays an annual dividend of $1.10 per share and has a dividend yield of 4.7%. MGM Resorts International pays out 47.1% of its earnings in the form of a dividend. Xenia Hotels & Resorts pays out 53.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Xenia Hotels & Resorts has increased its dividend for 2 consecutive years. Xenia Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
MGM Resorts International beats Xenia Hotels & Resorts on 11 of the 17 factors compared between the two stocks.
MGM Resorts International Company Profile
MGM Resorts International, through its subsidiaries, owns and operates integrated casino, hotel, and entertainment resorts in the United States and China. The company operates through two segments, Domestic Resorts and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. Its casino operations include various slots, table games, and race and sports book wagering. The company operates 14 resorts in the United States; and MGM Macau resort and casino in China, as well as develops an integrated casino, hotel, and entertainment resort on the Cotai Strip, Macau. The company also owns and operates Shadow Creek golf course, Primm Valley Golf Club, and Fallen Oak golf course. The company serves premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.
Xenia Hotels & Resorts Company Profile
Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests primarily in premium full service and lifestyle hotels, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 39 hotels, including 37 wholly owned hotels, comprising 11,497 rooms, across 18 states and the District of Columbia. Xenia's hotels are primarily in the luxury and upper upscale segments, and operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Aston, Fairmont, Hilton, and Loews, as well as leading independent management companies including Sage Hospitality, The Kessler Collection, Urgo Hotels & Resorts, and Davidson Hotels & Resorts. For more information on Xenia's business, refer to the Company website at www.xeniareit.com.