Comparing Travel + Leisure (NYSE:TNL) and RCI Hospitality (NASDAQ:RICK)

Travel + Leisure (NYSE:TNL) and RCI Hospitality (NASDAQ:RICK) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Analyst Ratings

This is a summary of current ratings and price targets for Travel + Leisure and RCI Hospitality, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Travel + Leisure	0	1	10	0	2.91
RCI Hospitality	1	0	0	0	1.00

Travel + Leisure currently has a consensus target price of $85.40, suggesting a potential upside of 11.26%. Given Travel + Leisure’s stronger consensus rating and higher probable upside, analysts clearly believe Travel + Leisure is more favorable than RCI Hospitality.

Risk & Volatility

Travel + Leisure has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, RCI Hospitality has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Profitability

This table compares Travel + Leisure and RCI Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Travel + Leisure	5.85%	-48.06%	6.48%
RCI Hospitality	-2.31%	-2.61%	-1.10%

Insider and Institutional Ownership

87.5% of Travel + Leisure shares are held by institutional investors. Comparatively, 53.8% of RCI Hospitality shares are held by institutional investors. 4.0% of Travel + Leisure shares are held by insiders. Comparatively, 9.6% of RCI Hospitality shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Travel + Leisure pays an annual dividend of $2.40 per share and has a dividend yield of 3.1%. RCI Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. Travel + Leisure pays out 67.4% of its earnings in the form of a dividend. RCI Hospitality pays out -41.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Travel + Leisure has increased its dividend for 5 consecutive years and RCI Hospitality has increased its dividend for 4 consecutive years. Travel + Leisure is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Travel + Leisure and RCI Hospitality”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Travel + Leisure	$4.02 billion	1.19	$230.00 million	$3.56	21.56
RCI Hospitality	$279.43 million	0.77	$10.81 million	($0.78)	-36.24

Travel + Leisure has higher revenue and earnings than RCI Hospitality. RCI Hospitality is trading at a lower price-to-earnings ratio than Travel + Leisure, indicating that it is currently the more affordable of the two stocks.

Summary

Travel + Leisure beats RCI Hospitality on 14 of the 17 factors compared between the two stocks.

About Travel + Leisure

Travel + Leisure Co., together with its subsidiaries, provides hospitality services and travel products in the United States and internationally. The company operates in two segments, Vacation Ownership; and Travel and Membership. The Vacation Ownership segment develops, markets, and sells vacation ownership interests (VOIs) to individual consumers, as well as provides consumer financing in connection with the sale of VOIs; and property management services at resorts. The Travel and Membership segment operates various travel businesses, including three vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment also offers private-label travel booking technology solutions. The company was formerly known as Wyndham Destinations, Inc. and changed its name to Travel + Leisure Co. in February 2021. Travel + Leisure Co. was founded in 1990 and is headquartered in Orlando, Florida.

About RCI Hospitality

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.