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HGV vs. H: Which Stock Is the Better Value Option?

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Investors with an interest in Hotels and Motels stocks have likely encountered both Hilton Grand Vacations (HGV - Free Report) and Hyatt Hotels (H - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Hilton Grand Vacations and Hyatt Hotels are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HGV is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

HGV currently has a forward P/E ratio of 11.16, while H has a forward P/E of 42.99. We also note that HGV has a PEG ratio of 1.29. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. H currently has a PEG ratio of 19.90.

Another notable valuation metric for HGV is its P/B ratio of 2.10. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, H has a P/B of 3.69.

Based on these metrics and many more, HGV holds a Value grade of A, while H has a Value grade of C.

HGV sticks out from H in both our Zacks Rank and Style Scores models, so value investors will likely feel that HGV is the better option right now.


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