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

Insider & Institutional Ownership

50.5% of Choice Hotels International shares are owned by institutional investors. 22.0% of Choice Hotels International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares 7 DAYS GROUP HOLDINGS LIMITED and Choice Hotels International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
7 DAYS GROUP HOLDINGS LIMITED N/A N/A N/A $0.53 N/A
Choice Hotels International $924.64 million 4.72 $139.37 million $2.70 28.57

Choice Hotels International has higher revenue and earnings than 7 DAYS GROUP HOLDINGS LIMITED. 7 DAYS GROUP HOLDINGS LIMITED 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 HOLDINGS LIMITED 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 increased its dividend for 3 consecutive years.

Profitability

This table compares 7 DAYS GROUP HOLDINGS LIMITED 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 HOLDINGS LIMITED N/A N/A N/A
Choice Hotels International 15.66% -60.41% 17.42%

Analyst Recommendations

This is a summary of current ratings for 7 DAYS GROUP HOLDINGS LIMITED and Choice Hotels International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
7 DAYS GROUP HOLDINGS LIMITED 0 0 0 0 N/A
Choice Hotels International 1 5 1 0 2.00

Choice Hotels International has a consensus target price of $64.17, suggesting a potential downside of 16.83%.

Summary

Choice Hotels International beats 7 DAYS GROUP HOLDINGS LIMITED on 9 of the 11 factors compared between the two stocks.

About 7 DAYS GROUP HOLDINGS LIMITED

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.

About Choice Hotels International

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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