Critical Survey: Marriott Vacations Worldwide (NYSE:VAC) versus OneSpaWorld (NASDAQ:OSW)

Marriott Vacations Worldwide (NYSE:VAC) and OneSpaWorld (NASDAQ:OSW) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

This table compares Marriott Vacations Worldwide and OneSpaWorld’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marriott Vacations Worldwide	-6.72%	11.37%	2.58%
OneSpaWorld	7.85%	18.00%	13.77%

Dividends

Marriott Vacations Worldwide pays an annual dividend of $3.20 per share and has a dividend yield of 3.4%. OneSpaWorld pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Marriott Vacations Worldwide pays out -31.7% of its earnings in the form of a dividend. OneSpaWorld pays out 26.7% 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. Marriott Vacations Worldwide has increased its dividend for 1 consecutive years. Marriott Vacations Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for Marriott Vacations Worldwide and OneSpaWorld, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marriott Vacations Worldwide	3	2	7	0	2.33
OneSpaWorld	0	1	6	1	3.00

Marriott Vacations Worldwide currently has a consensus price target of $83.70, indicating a potential downside of 12.11%. OneSpaWorld has a consensus price target of $28.20, indicating a potential upside of 7.72%. Given OneSpaWorld’s stronger consensus rating and higher probable upside, analysts plainly believe OneSpaWorld is more favorable than Marriott Vacations Worldwide.

Risk & Volatility

Marriott Vacations Worldwide has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, OneSpaWorld has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Insider & Institutional Ownership

89.5% of Marriott Vacations Worldwide shares are owned by institutional investors. Comparatively, 96.0% of OneSpaWorld shares are owned by institutional investors. 13.3% of Marriott Vacations Worldwide shares are owned by insiders. Comparatively, 3.6% of OneSpaWorld shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Marriott Vacations Worldwide and OneSpaWorld”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marriott Vacations Worldwide	$5.03 billion	0.65	-$308.00 million	($10.09)	-9.44
OneSpaWorld	$961.00 million	2.76	$71.62 million	$0.75	34.91

OneSpaWorld has lower revenue, but higher earnings than Marriott Vacations Worldwide. Marriott Vacations Worldwide is trading at a lower price-to-earnings ratio than OneSpaWorld, indicating that it is currently the more affordable of the two stocks.

Summary

OneSpaWorld beats Marriott Vacations Worldwide on 11 of the 18 factors compared between the two stocks.

About Marriott Vacations Worldwide

Marriott Vacations Worldwide Corporation, a vacation company, develops, markets, sells, and manages vacation ownership and related businesses, products, and services in the United States and internationally. It operates through two segments, Vacation Ownership and Exchange & Third-Party Management. The company manages vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, Hyatt Vacation Club, and Marriott Vacation Club Pulse brands. It develops, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and holds right to develop, market, and sell ownership residential products under The Ritz-Carlton Residences brand. In addition, the company offers exchange networks and membership programs, as well as provision of management services to other resorts and lodging properties through Interval International, and Aqua-Aston business brands. Further, it provides financing consumer purchases of vacation ownership products, and renting vacation ownership inventory. The company sells its upscale tier vacation ownership products primarily through a network of resort-based sales centers and off-site sales locations. The company was founded in 1984 and is headquartered in Orlando, Florida.

About OneSpaWorld

OneSpaWorld Holdings Limited operates health and wellness centers onboard cruise ships and at destination resorts worldwide. Its health and wellness centers offer services, such as traditional body, salon, and skin care services and products; self-service fitness facilities, specialized fitness classes, and personal fitness training; pain management, detoxifying programs, and body composition analyses; weight management programs and products; and medi-spa services. The company also provides its guests access to beauty and wellness brands, including ELEMIS, Grown Alchemist, Kérastase, Dysport, Restylane, Thermage, CoolSculpting, truSculpt 3D, truSculpt iD, Good Feet, and Hyperice with various brands offered in the cruise market. The company is based in Nassau, Bahamas.