Marriott International (NASDAQ:MAR) & Papa John’s International (NASDAQ:PZZA) Critical Review

Marriott International (NASDAQ:MAR) and Papa John’s International (NASDAQ:PZZA) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares Marriott International and Papa John’s International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marriott International	$26.19 billion	3.50	$2.60 billion	$9.65	36.43
Papa John’s International	$2.05 billion	0.32	$30.53 million	$0.79	25.59

Marriott International has higher revenue and earnings than Papa John’s International. Papa John’s International is trading at a lower price-to-earnings ratio than Marriott International, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Marriott International has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Papa John’s International has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Marriott International and Papa John’s International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marriott International	0	10	10	2	2.64
Papa John’s International	3	6	0	0	1.67

Marriott International currently has a consensus target price of $385.88, indicating a potential upside of 9.78%. Papa John’s International has a consensus target price of $32.00, indicating a potential upside of 58.26%. Given Papa John’s International’s higher probable upside, analysts plainly believe Papa John’s International is more favorable than Marriott International.

Profitability

This table compares Marriott International and Papa John’s International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marriott International	9.62%	-75.81%	10.56%
Papa John’s International	1.34%	-10.98%	5.68%

Dividends

Marriott International pays an annual dividend of $2.92 per share and has a dividend yield of 0.8%. Papa John’s International pays an annual dividend of $1.84 per share and has a dividend yield of 9.1%. Marriott International pays out 30.3% of its earnings in the form of a dividend. Papa John’s International pays out 232.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marriott International has raised its dividend for 3 consecutive years and Papa John’s International has raised its dividend for 4 consecutive years. Papa John’s International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

70.7% of Marriott International shares are held by institutional investors. 11.4% of Marriott International shares are held by company insiders. Comparatively, 1.8% of Papa John’s International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Marriott International beats Papa John’s International on 14 of the 18 factors compared between the two stocks.

About Marriott International

Marriott International, Inc. engages in operating, franchising, and licensing hotel, residential, timeshare, and other lodging properties worldwide. It operates its properties under the JW Marriott, The Ritz-Carlton, The Luxury Collection, W Hotels, St. Regis, EDITION, Bvlgari, Marriott Hotels, Sheraton, Westin, Autograph Collection, Renaissance Hotels, Le Méridien, Delta Hotels by Marriott, Tribute Portfolio, Gaylord Hotels, Design Hotels, Marriott Executive Apartments, Apartments by Marriott Bonvoy, Courtyard by Marriott, Fairfield by Marriott, Residence Inn by Marriott, SpringHill Suites by Marriott, Four Points by Sheraton, TownePlace Suites by Marriott, Aloft Hotels, AC Hotels by Marriott, Moxy Hotels, Element Hotels, Protea Hotels by Marriott, City Express by Marriott, and St. Regis Longboat Key brand names, as well as operates residences, timeshares, and yachts. The company was founded in 1927 and is headquartered in Bethesda, Maryland.

About Papa John’s International

Papa John’s International, Inc. engages in the operation and franchise of pizza delivery and carryout restaurants. It operates through the following segments: Domestic Company-owned Restaurants, North America Franchising, North America Commissaries, International Operations, and All Others. The Domestic Company-Owned Restaurants segment consists of retail sales of pizza and side items, breadsticks, cheese sticks, chicken poppers and wings, dessert items, and canned and bottled beverages. The North America Franchising segment involves the offering of sales and support activities, development rights, and collection of royalties from franchisees located in the United States and Canada. The North America Commissaries segment includes the eleven full-service regional dough production and distribution and quality control centers. The International Operations segment represents all restaurant operations outside of the United States and Canada. The All Others segment focuses on franchise contributions to marketing funds and sale, company-owned and franchised restaurants, information systems and related services used in restaurant operations, point-of-sale system, online and other technology-based ordering platforms, printing, and promotional items. The company was founded by John H. Schnatter in 1984 and is headquartered in Louisville, KY.