Critical Analysis: Meridian (NASDAQ:MRDN) & Wyndham Hotels & Resorts (NYSE:WH)

Wyndham Hotels & Resorts (NYSE:WH) and Meridian (NASDAQ:MRDN) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Wyndham Hotels & Resorts and Meridian, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wyndham Hotels & Resorts	0	5	9	0	2.64
Meridian	1	0	0	0	1.00

Wyndham Hotels & Resorts presently has a consensus price target of $94.67, indicating a potential upside of 20.47%. Meridian has a consensus price target of $21.60, indicating a potential upside of 120.41%. Given Meridian’s higher probable upside, analysts clearly believe Meridian is more favorable than Wyndham Hotels & Resorts.

Valuation & Earnings

This table compares Wyndham Hotels & Resorts and Meridian”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wyndham Hotels & Resorts	$1.43 billion	4.01	$193.00 million	$2.69	29.21
Meridian	$182.86 million	0.68	-$89.90 million	($6.74)	-1.45

Wyndham Hotels & Resorts has higher revenue and earnings than Meridian. Meridian is trading at a lower price-to-earnings ratio than Wyndham Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

93.5% of Wyndham Hotels & Resorts shares are owned by institutional investors. Comparatively, 2.7% of Meridian shares are owned by institutional investors. 2.3% of Wyndham Hotels & Resorts shares are owned by insiders. Comparatively, 9.9% of Meridian 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.

Risk & Volatility

Wyndham Hotels & Resorts has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, Meridian has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares Wyndham Hotels & Resorts and Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wyndham Hotels & Resorts	13.97%	77.43%	8.46%
Meridian	-41.41%	-117.87%	-58.87%

Summary

Wyndham Hotels & Resorts beats Meridian on 11 of the 14 factors compared between the two stocks.

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts, Inc. engages in the franchise and operation of hotels under the Wyndham brand. It operates through the Hotel Franchising and Hotel Management segments. The Hotel Franchising segment focuses on licensing the company’s lodging brands and providing related services to third-party hotel owners and others. The Hotel Management segment provides management services. The company was founded in 1990 and is headquartered in Parsippany, NJ.

About Meridian

Meridian Holdings Inc is engaged in the online gaming and betting business, providing sports betting, online casino, and gaming operations across multiple jurisdictions in Europe, Africa, and Central and South America. The company has three reportable segments: MeridianBet Group, GMAG, and RKings & CFAC. The MeridianBet Group segment includes retail and online sports betting, casinos, and related gaming operations. The GMAG segment focuses on the resale of third-party gaming content, mainly serving customers in the Asia-Pacific region. The RKings & CFAC segment is involved in pay-to-enter prize competitions and trade promotions conducted in the United Kingdom and Australia. It generates the majority of its revenue from the MeridianBet Group segment.