Marriott Vacations Worldwide (NYSE:VAC) and Aramark (NYSE:ARMK) Head-To-Head Review

Aramark (NYSE:ARMK) and Marriott Vacations Worldwide (NYSE:VAC) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Dividends

Aramark pays an annual dividend of $0.48 per share and has a dividend yield of 0.9%. Marriott Vacations Worldwide pays an annual dividend of $3.20 per share and has a dividend yield of 3.1%. Aramark pays out 33.6% of its earnings in the form of a dividend. Marriott Vacations Worldwide pays out -32.9% 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. Aramark has increased its dividend for 1 consecutive years and Marriott Vacations Worldwide has increased its dividend for 1 consecutive years. Marriott Vacations Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

89.5% of Marriott Vacations Worldwide shares are owned by institutional investors. 2.8% of Aramark shares are owned by company insiders. Comparatively, 13.3% of Marriott Vacations Worldwide shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Aramark and Marriott Vacations Worldwide”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$18.51 billion	0.79	$326.39 million	$1.43	38.85
Marriott Vacations Worldwide	$5.03 billion	0.71	-$308.00 million	($9.74)	-10.69

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

Risk & Volatility

Aramark has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Marriott Vacations Worldwide has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500.

Profitability

This table compares Aramark and Marriott Vacations Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	1.93%	17.68%	4.21%
Marriott Vacations Worldwide	-6.47%	12.27%	2.68%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Aramark and Marriott Vacations Worldwide, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	2	12	1	2.93
Marriott Vacations Worldwide	3	2	8	1	2.50

Aramark presently has a consensus price target of $69.14, suggesting a potential upside of 24.46%. Marriott Vacations Worldwide has a consensus price target of $107.83, suggesting a potential upside of 3.57%. Given Aramark’s stronger consensus rating and higher probable upside, equities analysts plainly believe Aramark is more favorable than Marriott Vacations Worldwide.

Summary

Aramark beats Marriott Vacations Worldwide on 11 of the 16 factors compared between the two stocks.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

About Marriott Vacations Worldwide

Marriott Vacations Worldwide Corporation, a vacation company, develops, markets, sells, and manages vacation ownership and related businesses, products, and services in the United States and internationally. It operates through two segments, Vacation Ownership and Exchange & Third-Party Management. The company manages vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, Hyatt Vacation Club, and Marriott Vacation Club Pulse brands. It develops, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and holds right to develop, market, and sell ownership residential products under The Ritz-Carlton Residences brand. In addition, the company offers exchange networks and membership programs, as well as provision of management services to other resorts and lodging properties through Interval International, and Aqua-Aston business brands. Further, it provides financing consumer purchases of vacation ownership products, and renting vacation ownership inventory. The company sells its upscale tier vacation ownership products primarily through a network of resort-based sales centers and off-site sales locations. The company was founded in 1984 and is headquartered in Orlando, Florida.