Head to Head Analysis: Choice Hotels International (NYSE:CHH) versus Portillo’s (NASDAQ:PTLO)

Choice Hotels International (NYSE:CHH) and Portillo’s (NASDAQ:PTLO) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and target prices for Choice Hotels International and Portillo’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Choice Hotels International	3	9	3	0	2.00
Portillo’s	1	8	2	0	2.09

Choice Hotels International currently has a consensus target price of $113.38, suggesting a potential downside of 2.09%. Portillo’s has a consensus target price of $5.66, suggesting a potential upside of 7.64%. Given Portillo’s’ stronger consensus rating and higher probable upside, analysts plainly believe Portillo’s is more favorable than Choice Hotels International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Choice Hotels International	20.28%	205.69%	10.68%
Portillo’s	1.85%	2.78%	0.86%

Insider and Institutional Ownership

65.6% of Choice Hotels International shares are owned by institutional investors. Comparatively, 98.3% of Portillo’s shares are owned by institutional investors. 23.9% of Choice Hotels International shares are owned by company insiders. Comparatively, 6.3% of Portillo’s shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Choice Hotels International	$1.60 billion	3.26	$369.95 million	$7.08	16.36
Portillo’s	$732.07 million	0.55	$19.34 million	$0.18	29.19

Choice Hotels International has higher revenue and earnings than Portillo’s. Choice Hotels International is trading at a lower price-to-earnings ratio than Portillo’s, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Choice Hotels International has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Portillo’s has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500.

Summary

Choice Hotels International beats Portillo’s on 9 of the 14 factors compared between the two stocks.

About Choice Hotels International

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor in the United States and internationally. It operates through Hotel Franchising & Management and Corporate & Other segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Ascend Hotel Collection, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Studios, WoodSpring Suites, Everhome Suites, Cambria Hotels, Radisson Blu, Radisson RED, Radisson, Park Plaza, Country Inn & Suites by Radisson, Radisson Inn & Suites, Park Inn by Radisson, Radisson Individuals, and Radisson Collection. Choice Hotels International, Inc. was founded in 1939 and is headquartered in North Bethesda, Maryland.

About Portillo’s

Portillo’s Inc. owns and operates fast casual restaurants in the United States. The company offers Chicago-style hot dogs and sausages, Italian beef sandwiches, char-grilled burgers, chopped salads, crinkle-cut French fries, homemade chocolate cakes, and chocolate cake shake. It offers its products through its website, application, and certain third-party platforms. Portillo’s Inc. was founded in 1963 and is based in Oak Brook, Illinois.