Reviewing Travel + Leisure (NYSE:TNL) and Target Hospitality (NASDAQ:TH)

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

Risk and Volatility

Travel + Leisure has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Target Hospitality has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.

Profitability

This table compares Travel + Leisure and Target 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%
Target Hospitality	-13.47%	-11.11%	-8.13%

Analyst Ratings

This is a summary of current recommendations for Travel + Leisure and Target Hospitality, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Travel + Leisure	0	1	10	0	2.91
Target Hospitality	1	1	2	1	2.60

Travel + Leisure currently has a consensus target price of $85.90, indicating a potential upside of 17.11%. Target Hospitality has a consensus target price of $20.33, indicating a potential upside of 20.89%. Given Target Hospitality’s higher possible upside, analysts clearly believe Target Hospitality is more favorable than Travel + Leisure.

Valuation & Earnings

This table compares Travel + Leisure and Target Hospitality”s gross 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	1.14	$230.00 million	$3.56	20.60
Target Hospitality	$320.64 million	5.25	-$37.12 million	($0.44)	-38.23

Travel + Leisure has higher revenue and earnings than Target Hospitality. Target 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.

Insider and Institutional Ownership

87.5% of Travel + Leisure shares are owned by institutional investors. Comparatively, 32.4% of Target Hospitality shares are owned by institutional investors. 4.0% of Travel + Leisure shares are owned by company insiders. Comparatively, 3.8% of Target Hospitality shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Travel + Leisure beats Target Hospitality on 10 of the 15 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 Target Hospitality

Target Hospitality Corp. operates as a specialty rental and hospitality services company in North America. The company operates through two segments, Hospitality & Facilities Services – South and Government. It owns a network of specialty rental accommodation units. In addition, the company provides catering and food, maintenance, housekeeping, grounds-keeping, security, health and recreation facilities, workforce community management, concierge, and laundry services. It serves the U.S. government contractors and investment grade natural resource development companies. Target Hospitality Corp. was founded in 1978 and is headquartered in The Woodlands, Texas.