Comparing La Quinta Holdings (LQ) and Marcus Corporation (The) (NYSE:MCS)

Marcus Corporation (The) (NYSE: MCS) and La Quinta Holdings (NYSE:LQ) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Profitability

This table compares Marcus Corporation (The) and La Quinta Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marcus Corporation (The) 7.18% 10.78% 4.71%
La Quinta Holdings 4.13% 7.28% 1.67%

Volatility & Risk

Marcus Corporation (The) has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, La Quinta Holdings has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500.

Institutional & Insider Ownership

57.6% of Marcus Corporation (The) shares are owned by institutional investors. Comparatively, 97.7% of La Quinta Holdings shares are owned by institutional investors. 33.5% of Marcus Corporation (The) shares are owned by company insiders. Comparatively, 1.6% of La Quinta Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Marcus Corporation (The) and La Quinta Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marcus Corporation (The) 0 0 4 0 3.00
La Quinta Holdings 1 4 2 0 2.14

Marcus Corporation (The) currently has a consensus price target of $37.60, suggesting a potential upside of 46.02%. La Quinta Holdings has a consensus price target of $12.69, suggesting a potential downside of 17.97%. Given Marcus Corporation (The)’s stronger consensus rating and higher probable upside, research analysts plainly believe Marcus Corporation (The) is more favorable than La Quinta Holdings.

Dividends

Marcus Corporation (The) pays an annual dividend of $0.50 per share and has a dividend yield of 1.9%. La Quinta Holdings does not pay a dividend. Marcus Corporation (The) pays out 33.1% of its earnings in the form of a dividend. Marcus Corporation (The) has increased its dividend for 5 consecutive years.

Valuation and Earnings

This table compares Marcus Corporation (The) and La Quinta Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Marcus Corporation (The) $594.17 million 0.83 $125.32 million $1.51 17.05
La Quinta Holdings $966.42 million 1.88 $299.78 million $0.35 44.20

La Quinta Holdings has higher revenue and earnings than Marcus Corporation (The). Marcus Corporation (The) is trading at a lower price-to-earnings ratio than La Quinta Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Marcus Corporation (The) beats La Quinta Holdings on 10 of the 17 factors compared between the two stocks.

Marcus Corporation (The) Company Profile

The Marcus Corporation operates principally in two business segments: Theatres, and Hotels and Resorts. The Theatres segment operates multiscreen motion picture theatres in Wisconsin, Illinois, Ohio, Minnesota, Iowa, North Dakota and Nebraska, and a family entertainment center in Wisconsin. The Hotels and Resorts segment owns and operates hotels and resorts in Wisconsin, Illinois, Oklahoma and Nebraska, and manages hotels, resorts and other properties in Wisconsin, Minnesota, Texas, Nevada, Georgia, Florida and California. As of December 31, 2015, the Company owned or operated 53 movie theatre locations with a total of 668 screens in Wisconsin, Illinois, Iowa, Minnesota, Nebraska, North Dakota and Ohio. Its owned and operated hotels and resorts include The Pfister Hotel, The Hilton Milwaukee City Center, Hilton Madison at Monona Terrace, The Grand Geneva Resort & Spa, InterContinental Milwaukee, Skirvin Hilton, AC Hotel Chicago Downtown and The Lincoln Marriott Cornhusker Hotel.

La Quinta Holdings Company Profile

La Quinta Holdings Inc. is an owner, operator and franchisor of select-service hotels primarily serving the midscale and upper-midscale sectors under the La Quinta brand. The Company’s segments include owned hotels, franchise and management, and corporate and other. The owned hotels segment is engaged in the operation of owned hotel properties. The franchise and management segment is engaged in various license, franchise and management agreements relating to its owned and franchised hotels. As of December 31, 2016, its portfolio consisted of 888 hotels representing approximately 87,200 rooms located primarily across 48 states in the United States, as well as in Canada, Mexico, Honduras and Colombia, of which 322 hotels were owned and operated, and 566 were franchised. As of December 31, 2016, the Company had a pipeline of 248 franchised hotels in the United States, Mexico, Colombia, Nicaragua, Guatemala, Chile and El Salvador.

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