Analyzing Pinnacle Entertainment (PNK) and Choice Hotels International (CHH)

Pinnacle Entertainment (NASDAQ:PNK) and Choice Hotels International (NYSE:CHH) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Profitability

This table compares Pinnacle Entertainment and Choice Hotels International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pinnacle Entertainment N/A N/A N/A
Choice Hotels International 14.08% -87.57% 18.88%

Earnings & Valuation

This table compares Pinnacle Entertainment and Choice Hotels International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pinnacle Entertainment N/A N/A N/A N/A N/A
Choice Hotels International $1.01 billion 4.39 $114.89 million $2.88 27.12

Choice Hotels International has higher revenue and earnings than Pinnacle Entertainment.

Dividends

Choice Hotels International pays an annual dividend of $0.86 per share and has a dividend yield of 1.1%. Pinnacle Entertainment does not pay a dividend. Choice Hotels International pays out 29.9% of its earnings in the form of a dividend. Choice Hotels International has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Pinnacle Entertainment and Choice Hotels International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pinnacle Entertainment 0 5 0 0 2.00
Choice Hotels International 2 6 1 0 1.89

Pinnacle Entertainment presently has a consensus price target of $35.00, indicating a potential upside of 7.53%. Choice Hotels International has a consensus price target of $82.50, indicating a potential upside of 5.63%. Given Pinnacle Entertainment’s stronger consensus rating and higher possible upside, analysts clearly believe Pinnacle Entertainment is more favorable than Choice Hotels International.

Insider & Institutional Ownership

87.1% of Pinnacle Entertainment shares are owned by institutional investors. Comparatively, 54.1% of Choice Hotels International shares are owned by institutional investors. 10.3% of Pinnacle Entertainment shares are owned by insiders. Comparatively, 22.0% of Choice Hotels International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Choice Hotels International beats Pinnacle Entertainment on 7 of the 12 factors compared between the two stocks.

About Pinnacle Entertainment

Pinnacle Entertainment, Inc. owns, develops, and operates casinos and related hospitality and entertainment facilities in the United States. It operates through Midwest, South, and West segments. As of February 28, 2018, the company owned and operated 16 gaming entertainment businesses located in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, and Pennsylvania. It also holds interest in the racing license owner, as well as a management contract, for Retama Park Racetrack outside of San Antonio, Texas. In addition, the company owns and operates a live and televised poker tournament series under the Heartland Poker Tour name. The company was formerly known as Hollywood Park, Inc. and changed its name to Pinnacle Entertainment, Inc. in February 2000. Pinnacle Entertainment, Inc. was founded in 1938 and is headquartered in Las Vegas, Nevada.

About Choice Hotels International

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. It operates through Hotel Franchising and SkyTouch Technology segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. It also develops and markets cloud-based technology products to the hotel industry, including inventory management, pricing, and connectivity to third party channels and hoteliers; and provides onsite and remote installation, training, and phone support services. As of October 16, 2018, the company franchised approximately 6,800 hotels with 550,000 rooms. Choice Hotels International, Inc. was founded in 1939 and is based in Rockville, Maryland.

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