GreenTree Hospitality Group (NYSE:GHG) and Red Lion Hotels (NYSE:RLH) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, institutional ownership, valuation, dividends and analyst recommendations.
GreenTree Hospitality Group pays an annual dividend of $0.28 per share and has a dividend yield of 2.5%. Red Lion Hotels does not pay a dividend. GreenTree Hospitality Group pays out 45.9% of its earnings in the form of a dividend.
This is a breakdown of recent ratings for GreenTree Hospitality Group and Red Lion Hotels, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|GreenTree Hospitality Group||0||1||2||0||2.67|
|Red Lion Hotels||0||0||1||0||3.00|
GreenTree Hospitality Group presently has a consensus price target of $16.53, suggesting a potential upside of 46.57%. Red Lion Hotels has a consensus price target of $13.00, suggesting a potential upside of 80.56%. Given Red Lion Hotels’ stronger consensus rating and higher probable upside, analysts plainly believe Red Lion Hotels is more favorable than GreenTree Hospitality Group.
This table compares GreenTree Hospitality Group and Red Lion Hotels’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|GreenTree Hospitality Group||45.04%||25.01%||14.80%|
|Red Lion Hotels||-3.68%||-8.65%||-5.80%|
Earnings and Valuation
This table compares GreenTree Hospitality Group and Red Lion Hotels’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|GreenTree Hospitality Group||$137.45 million||8.33||$57.32 million||$0.61||18.49|
|Red Lion Hotels||$135.85 million||1.31||$1.96 million||($0.45)||-16.00|
GreenTree Hospitality Group has higher revenue and earnings than Red Lion Hotels. Red Lion Hotels 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.
Risk & Volatility
GreenTree Hospitality Group has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Red Lion Hotels has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.
Insider and Institutional Ownership
8.7% of GreenTree Hospitality Group shares are held by institutional investors. Comparatively, 75.3% of Red Lion Hotels shares are held by institutional investors. 19.7% of Red Lion Hotels shares are held 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.
GreenTree Hospitality Group beats Red Lion Hotels on 11 of the 16 factors compared between the two stocks.
About GreenTree Hospitality Group
GreenTree Hospitality Group Ltd., through its subsidiaries, owns, operates, leases, franchises, and manages hotels in the People's Republic of China. The company operates hotels under the various brands, including GreenTree Eastern, as well as Gme, Gya, and VX; GreenTree Inns and GreenTree Alliance; and Vatica and Shell. As of March 31, 2018, it had 26 leased-and-operated hotels and 2,328 franchised-and-managed hotels with 195,552 hotel rooms in 266 cities. The company was founded in 2004 and is headquartered in Shanghai, the People's Republic of China. GreenTree Hospitality Group Ltd. is a subsidiary of GreenTree Inns Hotel Management Group, Inc.
About Red Lion Hotels
Red Lion Hotels Corporation, doing business as RLH Corporation, operates as a hospitality and leisure company the United States. It operates in two segments, Company Operated Hotels and Franchised Hotels. The company owns, manages, and franchises upscale, midscale, and economy hotels under the Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, GuestHouse, Settle Inn, Americas Best Value Inn, Canadas Best Value Inn, Signature and Signature Inn, Knights Inn, and Country Hearth Inns & Suites brands. It also develops technology and system offerings for the hospitality industry. As of December 31, 2018, it had a network of 1,318 franchised hotels, including a total of 83,800 rooms. The company was formerly known as WestCoast Hospitality Corporation and changed its name to Red Lion Hotels Corporation in September 2005. Red Lion Hotels Corporation was founded in 1937 and is headquartered in Denver, Colorado.
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