Analyzing The Priceline Group (PCLN) and Expedia (EXPE)

The Priceline Group (NASDAQ: PCLN) and Expedia (NASDAQ:EXPE) are both large-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Earnings and Valuation

This table compares The Priceline Group and Expedia’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Priceline Group $11.48 billion 7.99 $4.34 billion $47.10 39.67
Expedia $9.45 billion 2.33 $1.19 billion $2.11 68.89

The Priceline Group has higher revenue and earnings than Expedia. The Priceline Group is trading at a lower price-to-earnings ratio than Expedia, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for The Priceline Group and Expedia, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Priceline Group 0 5 25 0 2.83
Expedia 0 4 21 1 2.88

The Priceline Group currently has a consensus target price of $1,929.82, suggesting a potential upside of 3.27%. Expedia has a consensus target price of $162.96, suggesting a potential upside of 12.11%. Given Expedia’s stronger consensus rating and higher possible upside, analysts plainly believe Expedia is more favorable than The Priceline Group.

Dividends

Expedia pays an annual dividend of $1.20 per share and has a dividend yield of 0.8%. The Priceline Group does not pay a dividend. Expedia pays out 56.9% of its earnings in the form of a dividend.

Profitability

This table compares The Priceline Group and Expedia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Priceline Group 20.51% 33.10% 16.30%
Expedia 3.49% 10.98% 3.40%

Risk and Volatility

The Priceline Group has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Expedia has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.

Insider and Institutional Ownership

94.5% of The Priceline Group shares are held by institutional investors. Comparatively, 84.4% of Expedia shares are held by institutional investors. 0.4% of The Priceline Group shares are held by insiders. Comparatively, 20.9% of Expedia shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

The Priceline Group beats Expedia on 11 of the 17 factors compared between the two stocks.

About The Priceline Group

The Priceline Group Inc. is a provider of travel and restaurant online reservation and related services. The Company, through its online travel companies (OTCs), connects consumers wishing to make travel reservations with providers of travel services across the world. It offers consumers an array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. Its other brands include KAYAK, Rentalcars.com and OpenTable, Inc. (OpenTable). As of December 31, 2016, Booking.com offered accommodation reservation services for over 1,115,000 properties in over 220 countries and territories on its various Websites and in over 40 languages, which included over 568,000 vacation rental properties (updated property counts were available on the Booking.com Website).

About Expedia

Expedia, Inc. is an online travel company. The Company operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. The Company’s Core OTA segment provides a range of travel and advertising services to its customers across the world, through a range of brands, including Expedia.com and Hotels.com in the United States, and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The Company’s trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz Worldwide (Orbitz) for Business, provides managed travel services to corporate customers across the world. The Company’s HomeAway segment operates an online marketplace for the vacation rental industry.

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