Contrasting Choice Hotels International (CHH) and Tropicana Entertainment (OTCMKTS:TPCA)

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Tropicana Entertainment (OTCMKTS:TPCA) and Choice Hotels International (NYSE:CHH) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Profitability

This table compares Tropicana Entertainment and Choice Hotels International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tropicana Entertainment 5.77% 5.62% 4.35%
Choice Hotels International 17.26% -98.61% 19.52%

Earnings & Valuation

This table compares Tropicana Entertainment and Choice Hotels International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tropicana Entertainment $898.19 million 1.96 $49.84 million N/A N/A
Choice Hotels International $1.01 billion 4.41 $114.89 million $2.88 27.57

Choice Hotels International has higher revenue and earnings than Tropicana Entertainment.

Insider and Institutional Ownership

56.3% of Choice Hotels International shares are owned by institutional investors. 83.9% of Tropicana Entertainment shares are owned by insiders. Comparatively, 24.4% of Choice Hotels International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Tropicana Entertainment has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, Choice Hotels International has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Tropicana Entertainment and Choice Hotels International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tropicana Entertainment 0 0 0 0 N/A
Choice Hotels International 2 6 1 0 1.89

Choice Hotels International has a consensus target price of $80.63, indicating a potential upside of 1.56%. Given Choice Hotels International’s higher probable upside, analysts plainly believe Choice Hotels International is more favorable than Tropicana Entertainment.

Dividends

Choice Hotels International pays an annual dividend of $0.86 per share and has a dividend yield of 1.1%. Tropicana Entertainment does not pay a dividend. Choice Hotels International pays out 29.9% of its earnings in the form of a dividend.

Summary

Choice Hotels International beats Tropicana Entertainment on 10 of the 13 factors compared between the two stocks.

Tropicana Entertainment Company Profile

Tropicana Entertainment Inc. owns and operates casino and entertainment properties in the United States. It operates two casinos in Nevada; and one casino in each of Indiana, Louisiana, Mississippi, Missouri, and New Jersey, as well as a hotel, timeshare, and casino resort property located on the island of Aruba. As of December 31, 2017, the company properties included approximately 399,000 square feet of gaming space with approximately 8,000 slot machines, 270 table games and 5,800 hotel rooms. The company is headquartered in Las Vegas, Nevada. Tropicana Entertainment Inc. is a subsidiary of Icahn Enterprises Holdings L.P.

Choice Hotels International Company Profile

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. It operates through Hotel Franchising and SkyTouch Technology segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. It also develops and markets cloud-based technology products to the hotel industry, including inventory management, pricing, and connectivity to third party channels and hoteliers; and provides onsite and remote installation, training, and phone support services. As of January 28, 2019, the company had approximately 6,900 franchised hotels with 560,000 rooms in approximately 40 countries and territories. Choice Hotels International, Inc. was founded in 1939 and is based in Rockville, Maryland.

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