Head to Head Review: InterContinental Hotels Group (IHG) and Eldorado Resorts (ERI)

Eldorado Resorts (NYSE: IHG) and InterContinental Hotels Group (NYSE:IHG) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.

Profitability

This table compares Eldorado Resorts and InterContinental Hotels Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eldorado Resorts 9.99% 11.64% 3.06%
InterContinental Hotels Group N/A N/A N/A

Analyst Recommendations

This is a summary of current recommendations and price targets for Eldorado Resorts and InterContinental Hotels Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eldorado Resorts 0 1 7 0 2.88
InterContinental Hotels Group 0 4 2 0 2.33

Eldorado Resorts presently has a consensus target price of $48.81, indicating a potential downside of 1.90%. InterContinental Hotels Group has a consensus target price of $64.19, indicating a potential upside of 4.12%. Given InterContinental Hotels Group’s higher probable upside, analysts plainly believe InterContinental Hotels Group is more favorable than Eldorado Resorts.

Institutional & Insider Ownership

88.3% of Eldorado Resorts shares are held by institutional investors. Comparatively, 7.2% of InterContinental Hotels Group shares are held by institutional investors. 1.5% of Eldorado Resorts 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.

Dividends

InterContinental Hotels Group pays an annual dividend of $1.02 per share and has a dividend yield of 1.7%. Eldorado Resorts does not pay a dividend. InterContinental Hotels Group pays out 42.0% of its earnings in the form of a dividend. InterContinental Hotels Group has raised its dividend for 5 consecutive years.

Volatility and Risk

Eldorado Resorts has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, InterContinental Hotels Group has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Earnings & Valuation

This table compares Eldorado Resorts and InterContinental Hotels Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eldorado Resorts $1.47 billion 2.61 $73.93 million $0.01 4,975.00
InterContinental Hotels Group $1.78 billion 6.59 $592.00 million $2.43 25.37

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

Summary

Eldorado Resorts beats InterContinental Hotels Group on 9 of the 17 factors compared between the two stocks.

About Eldorado Resorts

Eldorado Resorts, Inc., a gaming and hospitality company, owns and operates gaming facilities in Ohio, Louisiana, Nevada, Pennsylvania, West Virginia, Colorado, Florida, Iowa, Mississippi, and Missouri. It owns and operates Eldorado Resort Casino Reno, a 814-room hotel, casino and entertainment facility; Silver Legacy Resort Casino, a 1,711-room themed hotel and casino; Circus Circus Reno, a 1,571-room hotel-casino and entertainment complex; Eldorado Resort Casino Shreveport, a 403-room, all suite art deco-style hotel and tri-level riverboat dockside casino; Mountaineer Casino, Racetrack & Resort, a 357-room hotel, casino, entertainment, and live thoroughbred horse racing facility; Presque Isle Downs & Casino, a casino and live thoroughbred horse racing facility; and Eldorado Gaming Scioto Downs, a modern racino. The company also owns and operates Isle Casino Hotel?Black Hawk, a land-based casino; Lady Luck Casino?Black Hawk, a land-based casino; Isle Casino Racing Pompano Park, a casino and harness racing track; Isle Casino Bettendorf, a land-based single-level casino; Isle Casino Waterloo, a SINGLE-level land-based casino; Isle of Capri Casino Hotel Lake Charles, a gaming vessel; Isle of Capri Casino Lula, a two dockside casino; Lady Luck Casino Vicksburg, a dockside casino; Isle of Capri Casino Boonville, a single-level dockside casino; Isle Casino Cape Girardeau, a dockside casino and pavilion and entertainment center; Lady Luck Casino Caruthersville, a riverboat casino; Isle of Capri Casino Kansas City, a dockside casino; and Lady Luck Casino Nemacolin, a casino property, as well as operates Racelinebet.com, which offers online and telephone wagering services on horse races. As of December 31, 2017, it owned and operated approximately 950,000 square feet of casino space with approximately 21,000 slot machines and video lottery terminals, 600 table and poker games, and 7,000 hotel rooms. Eldorado Resorts, Inc. was founded in 1973 and is based in Reno, Nevada.

About InterContinental Hotels Group

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, and Candlewood Suites brands. It also provides IHG Rewards Club, a hotel loyalty program. As of December 31, 2017, the company had 5,348 hotels with 798,075 rooms. InterContinental Hotels Group PLC was founded in 1967 and is headquartered in Denham, the United Kingdom.

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