Analyzing Accor (OTCMKTS:ACRFF) and Hilton Worldwide (NYSE:HLT)

Accor (OTCMKTS:ACRFF) and Hilton Worldwide (NYSE:HLT) are both consumer cyclical companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Accor and Hilton Worldwide, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accor	0	0	0	0	N/A
Hilton Worldwide	0	7	6	0	2.46

Hilton Worldwide has a consensus target price of $154.53, suggesting a potential upside of 3.99%. Given Hilton Worldwide’s higher probable upside, analysts clearly believe Hilton Worldwide is more favorable than Accor.

Insider & Institutional Ownership

34.9% of Accor shares are held by institutional investors. Comparatively, 94.7% of Hilton Worldwide shares are held by institutional investors. 2.4% of Hilton Worldwide shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Accor and Hilton Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Accor	N/A	N/A	N/A
Hilton Worldwide	13.23%	-128.71%	10.14%

Valuation & Earnings

This table compares Accor and Hilton Worldwide’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Accor	N/A	N/A	N/A	$0.66	53.32
Hilton Worldwide	$8.77 billion	4.43	$1.26 billion	$4.79	31.03

Hilton Worldwide has higher revenue and earnings than Accor. Hilton Worldwide is trading at a lower price-to-earnings ratio than Accor, indicating that it is currently the more affordable of the two stocks.

Dividends

Accor pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Hilton Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 0.4%. Accor pays out 60.2% of its earnings in the form of a dividend. Hilton Worldwide pays out 12.5% 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.

Summary

Hilton Worldwide beats Accor on 9 of the 12 factors compared between the two stocks.

About Accor

Accor SA operates a chain of hotels worldwide. It operates through three segments: Management & Franchise; Services to Owners and Hotel Assets; and Others. The company owns, operates, manages, and franchises hotels. It also provides digital services to independent hotel operators through D-edge platform; Gekko solutions for leisure and travel industry and large companies; and concierge and customized services through John Paul, as well as hotel booking services; and other services in events, fine dining, and entertainment through Paris Society and Potel & Chabot platforms. In addition, the company offers distribution activities, such as private sales of hotel accommodation and luxury vacations through VeryChic platform; rental of private residences operated by onefinestay; and coworking spaces through Wojo and Mama Works. Further, it provides hotel management, procurement, cash management, IT, and advertising services, as well as various advisory services. Accor SA was founded in 1967 and is headquartered in Issy-les-Moulineaux, France.

About Hilton Worldwide

Hilton Worldwide Holdings Inc., a hospitality company, engages in managing, franchising, owning, and leasing hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. The company engages in the hotel management and licensing of its brands. It operates luxury hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, and Conrad Hotels & Resorts brand; lifestyle hotels under the Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton brand; full service hotels under the Signia by Hilton, Hilton Hotels & Resorts, and DoubleTree by Hilton brand; service hotels under the Hilton Garden Inn, Hampton by Hilton, and Tru by Hilton brand; all-suite hotels under the Embassy Suites by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton brand; and premium economy hotel under the Spark by Hilton brand, as well as Hilton Grand Vacations. The company operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. The company was founded in 1919 and is headquartered in McLean, Virginia.