Financial Comparison: Hilton Worldwide (NYSE:HLT) vs. Churchill Downs (NASDAQ:CHDN)

Churchill Downs (NASDAQ:CHDN) and Hilton Worldwide (NYSE:HLT) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitability.

Dividends

Churchill Downs pays an annual dividend of $0.44 per share and has a dividend yield of 0.6%. Hilton Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. Churchill Downs pays out 7.5% of its earnings in the form of a dividend. Hilton Worldwide pays out 8.8% 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. Churchill Downs has increased its dividend for 14 consecutive years. Churchill Downs is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Churchill Downs has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Hilton Worldwide has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares Churchill Downs and Hilton Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	13.82%	42.16%	6.31%
Hilton Worldwide	12.69%	-35.24%	11.84%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Churchill Downs and Hilton Worldwide, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	0	1	10	0	2.91
Hilton Worldwide	0	8	15	2	2.76

Churchill Downs presently has a consensus target price of $134.89, indicating a potential upside of 77.11%. Hilton Worldwide has a consensus target price of $354.00, indicating a potential upside of 9.45%. Given Churchill Downs’ stronger consensus rating and higher probable upside, equities analysts plainly believe Churchill Downs is more favorable than Hilton Worldwide.

Insider & Institutional Ownership

82.6% of Churchill Downs shares are held by institutional investors. Comparatively, 95.9% of Hilton Worldwide shares are held by institutional investors. 5.9% of Churchill Downs shares are held by company insiders. Comparatively, 2.7% of Hilton Worldwide shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Churchill Downs and Hilton Worldwide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Churchill Downs	$2.93 billion	1.81	$383.00 million	$5.83	13.06
Hilton Worldwide	$12.48 billion	5.83	$1.46 billion	$6.81	47.50

Hilton Worldwide has higher revenue and earnings than Churchill Downs. Churchill Downs is trading at a lower price-to-earnings ratio than Hilton Worldwide, indicating that it is currently the more affordable of the two stocks.

Summary

Hilton Worldwide beats Churchill Downs on 10 of the 18 factors compared between the two stocks.

About Churchill Downs

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.

About Hilton Worldwide

Hilton Worldwide Holdings Inc., a hospitality company, engages in managing, franchising, owning, and leasing hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. The company engages in the hotel management and licensing of its brands. It operates luxury hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, and Conrad Hotels & Resorts brand; lifestyle hotels under the Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton brand; full service hotels under the Signia by Hilton, Hilton Hotels & Resorts, and DoubleTree by Hilton brand; service hotels under the Hilton Garden Inn, Hampton by Hilton, and Tru by Hilton brand; all-suite hotels under the Embassy Suites by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton brand; and economy hotel under the Spark by Hilton brand, as well as Hilton Grand Vacations. The company operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. The company was founded in 1919 and is headquartered in McLean, Virginia.