Critical Review: GreenTree Hospitality Group (NYSE:GHG) versus Domino’s Pizza (NASDAQ:DPZ)

GreenTree Hospitality Group (NYSE:GHG) and Domino’s Pizza (NASDAQ:DPZ) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for GreenTree Hospitality Group and Domino’s Pizza, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GreenTree Hospitality Group	1	0	0	0	1.00
Domino’s Pizza	1	14	16	0	2.48

Domino’s Pizza has a consensus target price of $397.42, suggesting a potential upside of 16.17%. Given Domino’s Pizza’s stronger consensus rating and higher possible upside, analysts plainly believe Domino’s Pizza is more favorable than GreenTree Hospitality Group.

Volatility and Risk

GreenTree Hospitality Group has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Dividends

GreenTree Hospitality Group pays an annual dividend of $0.05 per share and has a dividend yield of 4.7%. Domino’s Pizza pays an annual dividend of $7.96 per share and has a dividend yield of 2.3%. GreenTree Hospitality Group pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Domino’s Pizza pays out 45.2% of its earnings in the form of a dividend. Domino’s Pizza has increased its dividend for 12 consecutive years.

Institutional & Insider Ownership

8.1% of GreenTree Hospitality Group shares are held by institutional investors. Comparatively, 94.6% of Domino’s Pizza shares are held by institutional investors. 88.7% of GreenTree Hospitality Group shares are held by insiders. Comparatively, 0.9% of Domino’s Pizza shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares GreenTree Hospitality Group and Domino’s Pizza”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GreenTree Hospitality Group	$156.92 million	0.69	$23.85 million	$0.05	21.40
Domino’s Pizza	$4.94 billion	2.29	$601.70 million	$17.63	19.40

Domino’s Pizza has higher revenue and earnings than GreenTree Hospitality Group. Domino’s Pizza is trading at a lower price-to-earnings ratio than GreenTree Hospitality Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GreenTree Hospitality Group and Domino’s Pizza’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GreenTree Hospitality Group	4.14%	2.49%	0.84%
Domino’s Pizza	11.86%	-15.15%	34.16%

Summary

Domino’s Pizza beats GreenTree Hospitality Group on 13 of the 17 factors compared between the two stocks.

About GreenTree Hospitality Group

GreenTree Hospitality Group Ltd., through its subsidiaries, develops leased-and-operated, and franchised-and-managed hotels under the GreenTree Inns brand in the People's Republic of China. It also engages in investment holding activities; and provision of information technology services. The company was founded in 2004 and is headquartered in Shanghai, the People's Republic of China.

About Domino’s Pizza

Domino’s Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The company operates through three segments: U.S. Stores, International Franchise, and Supply Chain. It offers pizzas under the Domino’s brand name through company-owned and franchised stores. It also provides oven-baked sandwiches, pastas, boneless chicken and chicken wings, breads and dips, desserts, and soft drink products, as well as loaded tots and pepperoni stuffed cheesy breads. Domino’s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.