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HGV vs. CHH: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Hotels and Motels sector might want to consider either Hilton Grand Vacations (HGV - Free Report) or Choice Hotels (CHH - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Hilton Grand Vacations is sporting a Zacks Rank of #1 (Strong Buy), while Choice Hotels has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HGV is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

HGV currently has a forward P/E ratio of 10.67, while CHH has a forward P/E of 19.49. We also note that HGV has a PEG ratio of 1.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CHH currently has a PEG ratio of 2.16.

Another notable valuation metric for HGV is its P/B ratio of 2.04. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CHH has a P/B of 927.03.

These are just a few of the metrics contributing to HGV's Value grade of B and CHH's Value grade of C.

HGV sticks out from CHH in both our Zacks Rank and Style Scores models, so value investors will likely feel that HGV is the better option right now.


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Choice Hotels International, Inc. (CHH) - free report >>

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