InterContinental Hotels Group (NYSE:IHG) and Boyd Gaming (NYSE:BYD) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for InterContinental Hotels Group and Boyd Gaming, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InterContinental Hotels Group 3 4 2 0 1.89
Boyd Gaming 0 1 8 0 2.89

InterContinental Hotels Group presently has a consensus target price of $66.00, indicating a potential upside of 9.15%. Boyd Gaming has a consensus target price of $36.50, indicating a potential upside of 31.06%. Given Boyd Gaming’s stronger consensus rating and higher possible upside, analysts clearly believe Boyd Gaming is more favorable than InterContinental Hotels Group.

Dividends

InterContinental Hotels Group pays an annual dividend of $0.75 per share and has a dividend yield of 1.2%. Boyd Gaming pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. InterContinental Hotels Group pays out 29.3% of its earnings in the form of a dividend. Boyd Gaming pays out 23.3% 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. InterContinental Hotels Group has increased its dividend for 6 consecutive years. InterContinental Hotels Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares InterContinental Hotels Group and Boyd Gaming’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
InterContinental Hotels Group $1.78 billion 6.14 $592.00 million $2.56 23.62
Boyd Gaming $2.38 billion 1.31 $189.19 million $1.03 27.04

InterContinental Hotels Group has higher earnings, but lower revenue than Boyd Gaming. InterContinental Hotels Group is trading at a lower price-to-earnings ratio than Boyd Gaming, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

InterContinental Hotels Group has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Boyd Gaming has a beta of 2.13, suggesting that its stock price is 113% more volatile than the S&P 500.

Insider & Institutional Ownership

7.2% of InterContinental Hotels Group shares are owned by institutional investors. Comparatively, 72.0% of Boyd Gaming shares are owned by institutional investors. 28.9% of Boyd Gaming shares are owned by company 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 InterContinental Hotels Group and Boyd Gaming’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InterContinental Hotels Group N/A N/A N/A
Boyd Gaming 7.19% 12.53% 2.86%

Summary

Boyd Gaming beats InterContinental Hotels Group on 12 of the 17 factors compared between the two stocks.

InterContinental Hotels Group Company Profile

InterContinental Hotels Group PLC owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China. The company operates hotels, resorts, and restaurants under the InterContinental, Kimpton, Hotel Indigo, EVEN, HUALUXE, Crowne Plaza, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, Holiday Inn Resort, avid, Staybridge Suites, Candlewood Suites, and InterContinental Hotels & Resorts brands. It also provides IHG Rewards Club, a hotel loyalty program. As of August 22, 2018, the company had approximately 5,400 hotels with 810,000 rooms. InterContinental Hotels Group PLC was founded in 1967 and is headquartered in Denham, the United Kingdom.

Boyd Gaming Company Profile

Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company. It operates through three segments: Las Vegas Locals, Downtown Las Vegas, and Midwest and South. As of October 15, 2018, the company operated 29 gaming entertainment properties offering a total of 1.76 million square feet of casino space, approximately 38,000 gaming machines, 900 table games, 11,000 hotel rooms, and 320 food and beverage outlets located in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania. It also owns and operates a travel agency in Hawaii. Boyd Gaming Corporation was founded in 1975 and is headquartered in Las Vegas, Nevada.

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