Head to Head Comparison: Extended Stay America (STAY) & Red Lion Hotels Corporation (RLH)

Extended Stay America (NYSE: STAY) and Red Lion Hotels Corporation (NYSE:RLH) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

99.6% of Extended Stay America shares are owned by institutional investors. Comparatively, 63.8% of Red Lion Hotels Corporation shares are owned by institutional investors. 0.5% of Extended Stay America shares are owned by company insiders. Comparatively, 14.7% of Red Lion Hotels Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Extended Stay America pays an annual dividend of $0.84 per share and has a dividend yield of 5.0%. Red Lion Hotels Corporation does not pay a dividend. Extended Stay America pays out 215.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extended Stay America has increased its dividend for 2 consecutive years.

Volatility & Risk

Extended Stay America has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Red Lion Hotels Corporation has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Earnings and Valuation

This table compares Extended Stay America and Red Lion Hotels Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Extended Stay America $1.27 billion 2.55 $69.93 million $0.39 43.26
Red Lion Hotels Corporation $164.07 million 1.18 -$4.67 million ($0.18) -45.56

Extended Stay America has higher revenue and earnings than Red Lion Hotels Corporation. Red Lion Hotels Corporation is trading at a lower price-to-earnings ratio than Extended Stay America, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Extended Stay America and Red Lion Hotels Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Extended Stay America 5.83% 14.53% 4.74%
Red Lion Hotels Corporation -1.81% -2.53% -1.37%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Extended Stay America and Red Lion Hotels Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Extended Stay America 0 1 7 0 2.88
Red Lion Hotels Corporation 0 0 1 0 3.00

Extended Stay America currently has a consensus price target of $20.53, suggesting a potential upside of 21.70%. Red Lion Hotels Corporation has a consensus price target of $12.50, suggesting a potential upside of 52.44%. Given Red Lion Hotels Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Red Lion Hotels Corporation is more favorable than Extended Stay America.

Summary

Extended Stay America beats Red Lion Hotels Corporation on 12 of the 16 factors compared between the two stocks.

About Extended Stay America

Extended Stay America, Inc. is a owner/operator of company-branded hotels in North America. The Company operates in the extended stay lodging industry. The Company owns and operates approximately 700 hotel properties consisting of approximately 75,900 rooms located in 44 states across the United States of America and in Canada. The Company owns and operates hotels under the core brand, Extended Stay America. In addition, the Company owns and operates three Extended Stay Canada hotels, 49 hotels in the economy extended stay segment under the Crossland Economy Studios and Hometown Inn brands, and also manage two Extended Stay America hotels.

About Red Lion Hotels Corporation

Red Lion Hotels Corporation (RLHC) is a hospitality and leisure company. The Company is engaged in the franchising, management and ownership of hotels under the brands, including Hotel RL, Red Lion Hotel, Red Lion Inn & Suites, GuestHouse and Settle Inn & Suites (collectively the RLHC Brands). The RLHC brands represent upscale, midscale and economy hotels. The Company’s segments include company operated hotel segment, franchised hotels segment and other. The company operated hotel segment is engaged in guest room rentals, and food and beverage operations at its operated hotels. The franchised hotels segment is engaged in licensing its brands to franchisees. The franchised hotels segment offers various programs, which include its reservation system, guest loyalty program, national and regional sales, revenue management tools, quality inspections, advertising and brand standards.

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