Head-To-Head Analysis: Hyatt Hotels (NYSE:H) versus Cheesecake Factory (NASDAQ:CAKE)

Cheesecake Factory (NASDAQ:CAKE) and Hyatt Hotels (NYSE:H) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Profitability

This table compares Cheesecake Factory and Hyatt Hotels’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheesecake Factory	4.61%	43.97%	6.18%
Hyatt Hotels	1.10%	7.27%	1.85%

Valuation & Earnings

This table compares Cheesecake Factory and Hyatt Hotels”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheesecake Factory	$3.88 billion	1.46	$148.43 million	$3.69	30.73
Hyatt Hotels	$7.15 billion	2.38	-$52.00 million	$0.82	220.71

Cheesecake Factory has higher earnings, but lower revenue than Hyatt Hotels. Cheesecake Factory is trading at a lower price-to-earnings ratio than Hyatt Hotels, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.5% of Cheesecake Factory shares are owned by institutional investors. Comparatively, 73.5% of Hyatt Hotels shares are owned by institutional investors. 8.0% of Cheesecake Factory shares are owned by insiders. Comparatively, 23.6% of Hyatt Hotels shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Cheesecake Factory pays an annual dividend of $1.20 per share and has a dividend yield of 1.1%. Hyatt Hotels pays an annual dividend of $0.60 per share and has a dividend yield of 0.3%. Cheesecake Factory pays out 32.5% of its earnings in the form of a dividend. Hyatt Hotels pays out 73.2% 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. Hyatt Hotels has raised its dividend for 1 consecutive years. Cheesecake Factory is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent recommendations for Cheesecake Factory and Hyatt Hotels, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheesecake Factory	2	10	5	1	2.28
Hyatt Hotels	0	6	9	0	2.60

Cheesecake Factory currently has a consensus target price of $81.00, suggesting a potential downside of 28.56%. Hyatt Hotels has a consensus target price of $197.29, suggesting a potential upside of 9.01%. Given Hyatt Hotels’ stronger consensus rating and higher possible upside, analysts clearly believe Hyatt Hotels is more favorable than Cheesecake Factory.

Risk & Volatility

Cheesecake Factory has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Hyatt Hotels has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.

About Hyatt Hotels

Hyatt Hotels Corporation operates as a hospitality company in the United States and internationally. It operates through Owned and Leased Hotels, Americas Management and Franchising, ASPAC Management and Franchising, EAME Management and Franchising, and Apple Leisure Group segments. The company manages, franchises, licenses, owns, and leases portfolio of properties, consisting of full-service hotels and resorts, select service hotels, and other properties, including timeshare, fractional, residential, vacation, and condominium units. It operates its properties under the Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt, Hyatt vacation Club, Hyatt Place, Hyatt House, Hyatt Studios, UrCove, Miraval, Alila, Andaz, Thompson Hotels, Dream Hotels, Hyatt Centric, Caption by Hyatt, The Unbound Collection by Hyatt, Destination by Hyatt, JdV by Hyatt, Hyatt Ziva, Hyatt Zilara, Zoëtry Wellness & Spa Resorts, Secrets Resorts & Spas, Breathless Resorts & Spas, Dreams Resorts & Spas, Hyatt Vivid Hotel & Resorts, Alua Hotels & Resorts, Sunscape Resorts & Spas, Maison Métier, and The Barnett brand name. The company offers short-term vacation rental platform, Homes & Hideaways by World of Hyatt, that features direct booking for short-term private home rentals in the United States. It primarily serves corporations; national, state, and regional associations; specialty market accounts, including social, government, military, educational, religious, and fraternal organizations; travel agency and luxury organizations; and a group of individual consumers. It also operates World of Hyatt loyalty program, which rewards points that can be redeemed for hotel nights and other rewards. Hyatt Hotels Corporation was founded in 1957 and is headquartered in Chicago, Illinois.