Texas Roadhouse (NASDAQ:TXRH – Get Free Report) and Marriott International (NASDAQ:MAR – Get Free Report) are both large-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.
Institutional and Insider Ownership
94.8% of Texas Roadhouse shares are held by institutional investors. Comparatively, 70.7% of Marriott International shares are held by institutional investors. 0.5% of Texas Roadhouse shares are held by company insiders. Comparatively, 11.4% of Marriott International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Dividends
Texas Roadhouse pays an annual dividend of $3.00 per share and has a dividend yield of 1.5%. Marriott International pays an annual dividend of $2.92 per share and has a dividend yield of 0.8%. Texas Roadhouse pays out 48.0% of its earnings in the form of a dividend. Marriott International pays out 30.3% 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. Texas Roadhouse has raised its dividend for 6 consecutive years and Marriott International has raised its dividend for 3 consecutive years. Texas Roadhouse is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Texas Roadhouse | $5.88 billion | 2.28 | $405.55 million | $6.25 | 32.72 |
| Marriott International | $26.19 billion | 3.55 | $2.60 billion | $9.65 | 36.93 |
Marriott International has higher revenue and earnings than Texas Roadhouse. Texas Roadhouse is trading at a lower price-to-earnings ratio than Marriott International, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Texas Roadhouse has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Marriott International has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings for Texas Roadhouse and Marriott International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Texas Roadhouse | 0 | 13 | 10 | 0 | 2.43 |
| Marriott International | 0 | 9 | 10 | 1 | 2.60 |
Texas Roadhouse currently has a consensus target price of $208.48, indicating a potential upside of 1.95%. Marriott International has a consensus target price of $385.65, indicating a potential upside of 8.21%. Given Marriott International’s stronger consensus rating and higher probable upside, analysts plainly believe Marriott International is more favorable than Texas Roadhouse.
Profitability
This table compares Texas Roadhouse and Marriott International’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Texas Roadhouse | 6.63% | 27.20% | 11.75% |
| Marriott International | 9.62% | -75.81% | 10.56% |
Summary
Marriott International beats Texas Roadhouse on 12 of the 17 factors compared between the two stocks.
About Texas Roadhouse
Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally. It also operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names in 49 states and ten internationally. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.
About Marriott International
Marriott International, Inc. engages in operating, franchising, and licensing hotel, residential, timeshare, and other lodging properties worldwide. It operates its properties under the JW Marriott, The Ritz-Carlton, The Luxury Collection, W Hotels, St. Regis, EDITION, Bvlgari, Marriott Hotels, Sheraton, Westin, Autograph Collection, Renaissance Hotels, Le Méridien, Delta Hotels by Marriott, Tribute Portfolio, Gaylord Hotels, Design Hotels, Marriott Executive Apartments, Apartments by Marriott Bonvoy, Courtyard by Marriott, Fairfield by Marriott, Residence Inn by Marriott, SpringHill Suites by Marriott, Four Points by Sheraton, TownePlace Suites by Marriott, Aloft Hotels, AC Hotels by Marriott, Moxy Hotels, Element Hotels, Protea Hotels by Marriott, City Express by Marriott, and St. Regis Longboat Key brand names, as well as operates residences, timeshares, and yachts. The company was founded in 1927 and is headquartered in Bethesda, Maryland.
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