MGM Growth Properties (NYSE: MGP) and FelCor Lodging Trust (NYSE:FCH) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Institutional and Insider Ownership

86.7% of MGM Growth Properties shares are held by institutional investors. Comparatively, 78.8% of FelCor Lodging Trust shares are held by institutional investors. 0.6% of MGM Growth Properties shares are held by company insiders. Comparatively, 3.3% of FelCor Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares MGM Growth Properties and FelCor Lodging Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MGM Growth Properties 6.21% 0.81% 0.48%
FelCor Lodging Trust -0.66% N/A -0.35%

Dividends

MGM Growth Properties pays an annual dividend of $1.58 per share and has a dividend yield of 5.3%. FelCor Lodging Trust pays an annual dividend of $0.24 per share and has a dividend yield of 3.3%. MGM Growth Properties pays out 205.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FelCor Lodging Trust pays out -49.0% of its earnings in the form of a dividend. FelCor Lodging Trust has increased its dividend for 2 consecutive years.

Risk and Volatility

MGM Growth Properties has a beta of -1.34, meaning that its share price is 234% less volatile than the S&P 500. Comparatively, FelCor Lodging Trust has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Valuation & Earnings

This table compares MGM Growth Properties and FelCor Lodging Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MGM Growth Properties $725.00 million 2.39 $613.53 million $0.77 38.99
FelCor Lodging Trust $828.93 million 1.22 $207.52 million ($0.49) -14.90

MGM Growth Properties has higher revenue, but lower earnings than FelCor Lodging Trust. FelCor Lodging Trust is trading at a lower price-to-earnings ratio than MGM Growth Properties, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for MGM Growth Properties and FelCor Lodging Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGM Growth Properties 0 1 4 0 2.80
FelCor Lodging Trust 0 2 0 0 2.00

MGM Growth Properties presently has a consensus price target of $31.20, suggesting a potential upside of 3.93%. FelCor Lodging Trust has a consensus price target of $7.00, suggesting a potential downside of 4.11%. Given MGM Growth Properties’ stronger consensus rating and higher possible upside, equities research analysts clearly believe MGM Growth Properties is more favorable than FelCor Lodging Trust.

Summary

MGM Growth Properties beats FelCor Lodging Trust on 11 of the 16 factors compared between the two stocks.

MGM Growth Properties Company Profile

MGM Growth Properties LLC is a real estate investment trust engaged in the acquisition, ownership and leasing of destination entertainment and leisure resorts, whose amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. Its portfolio consists of approximately 10 destination resorts. It has over six entertainment and gaming-related properties located on the Las Vegas Strip, including Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor and Excalibur, and The Park, a dining and entertainment complex located between New York-New York and Monte Carlo. Outside of Las Vegas, it owns over four casino resort properties, including MGM Grand Detroit in Detroit, Michigan, Borgata Hotel Casino & Spa in Atlantic City, New Jersey, and Beau Rivage and Gold Strike Tunica, both of which are located in Mississippi. It operates approximately 27,330 hotel rooms, over 200 restaurants, approximately 100 retail outlets and over 20 entertainment venues.

FelCor Lodging Trust Company Profile

FelCor Lodging Trust Incorporated is a real estate investment trust (REIT). The Company, through its subsidiary, FelCor Lodging Limited Partnership, held ownership interests in 39 hotels with 11,500 rooms, as of December 31, 2016. The Company sells, acquires, rebrands and redevelops hotels. As of December 31, 2016, the Company’s hotels were located in 14 states of the United States. The Company holds a portfolio of hotels managed by Hilton Worldwide (Hilton); Wyndham Worldwide (Wyndham); Marriott International Inc. (Marriott); InterContinental Hotels Group (IHG); AccorHotels Group, Highgate Hotels (Highgate), SBE and Aimbridge Hospitality. The Company’s hotels include Embassy Suites Atlanta-Buckhead; DoubleTree Suites by Hilton Austin; Embassy Suites Birmingham; The Fairmont Copley Plaza, Boston; Wyndham Boston Beacon Hill; Embassy Suites Boston-Marlborough, and Sheraton Burlington Hotel & Conference Center.

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