Head-To-Head Survey: Meliá Hotels International (OTCMKTS:SMIZF) & Hilton Worldwide (NYSE:HLT)

Meliá Hotels International (OTCMKTS:SMIZF) and Hilton Worldwide (NYSE:HLT) are both consumer cyclical companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional and Insider Ownership

24.1% of Meliá Hotels International shares are held by institutional investors. Comparatively, 95.9% of Hilton Worldwide shares are held by institutional investors. 2.5% of Hilton Worldwide shares are held by company 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.

Earnings & Valuation

This table compares Meliá Hotels International and Hilton Worldwide”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meliá Hotels International	N/A	N/A	N/A	($0.34)	-21.08
Hilton Worldwide	$10.81 billion	5.53	$1.14 billion	$4.60	51.92

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Meliá Hotels International and Hilton Worldwide, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meliá Hotels International	0	0	0	0	N/A
Hilton Worldwide	0	9	10	0	2.53

Hilton Worldwide has a consensus price target of $216.05, suggesting a potential downside of 9.53%. Given Hilton Worldwide’s higher possible upside, analysts plainly believe Hilton Worldwide is more favorable than Meliá Hotels International.

Profitability

This table compares Meliá Hotels International and Hilton Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meliá Hotels International	N/A	N/A	N/A
Hilton Worldwide	11.20%	-69.65%	11.20%

Dividends

Meliá Hotels International pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. Hilton Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 0.3%. Meliá Hotels International pays out -9.4% of its earnings in the form of a dividend. Hilton Worldwide pays out 13.0% 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. Meliá Hotels International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Hilton Worldwide beats Meliá Hotels International on 9 of the 12 factors compared between the two stocks.

About Meliá Hotels International

Meliá Hotels International, S.A. owns, manages, operates, leases, and franchises hotels worldwide. It operates through Hotel Management, Hotel Business, Other Business Linked to Hotel Management, Real Estate, and Vacation Club segments. The company operates hotels under the Gran Meliá Hotels & Resorts, Paradisus by Meliá, ME by Meliá, Meliá Hotels & Resorts, INNSIDE by Meliá, Sol by Meliá, ZEL, and Circle by Melia brand names, as well as Meliá PRO. It also operates vacation club; develops and operates real estate properties; and engages in the casinos and tour-operator activities. The company was formerly known as Sol Meliá, S.A. and changed its name to Meliá Hotels International, S.A. in June 2011. Meliá Hotels International, S.A. was founded in 1956 and is based in Palma de Mallorca, Spain.

About Hilton Worldwide

Hilton Worldwide Holdings Inc., a hospitality company, engages in managing, franchising, owning, and leasing 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. It operates luxury hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, and Conrad Hotels & Resorts brand; lifestyle hotels under the Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton brand; full service hotels under the Signia by Hilton, Hilton Hotels & Resorts, and DoubleTree by Hilton brand; service hotels under the Hilton Garden Inn, Hampton by Hilton, and Tru by Hilton brand; all-suite hotels under the Embassy Suites by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton brand; and economy hotel under the Spark by Hilton brand, as well as Hilton Grand Vacations. The company operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. The company was founded in 1919 and is headquartered in McLean, Virginia.