Redfin (NASDAQ: RDFN) and Marriott Vacations Worldwide (NYSE:VAC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Redfin -44.74% N/A -11.02%
Marriott Vacations Worldwide 11.25% 16.31% 6.02%

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Redfin 1 4 7 0 2.50
Marriott Vacations Worldwide 0 2 7 0 2.78

Redfin presently has a consensus target price of $26.09, suggesting a potential upside of 18.76%. Marriott Vacations Worldwide has a consensus target price of $138.08, suggesting a potential upside of 16.82%. Given Redfin’s higher possible upside, research analysts clearly believe Redfin is more favorable than Marriott Vacations Worldwide.

Institutional and Insider Ownership

51.9% of Redfin shares are owned by institutional investors. Comparatively, 73.8% of Marriott Vacations Worldwide shares are owned by institutional investors. 8.8% of Redfin shares are owned by insiders. Comparatively, 3.5% of Marriott Vacations Worldwide shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Redfin and Marriott Vacations Worldwide’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Redfin $370.04 million 4.92 -$15.00 million ($0.20) -109.85
Marriott Vacations Worldwide $1.95 billion 1.61 $226.77 million $5.78 20.45

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

Dividends

Marriott Vacations Worldwide pays an annual dividend of $1.60 per share and has a dividend yield of 1.4%. Redfin does not pay a dividend. Marriott Vacations Worldwide pays out 27.7% of its earnings in the form of a dividend. Marriott Vacations Worldwide has increased its dividend for 3 consecutive years.

Summary

Marriott Vacations Worldwide beats Redfin on 11 of the 15 factors compared between the two stocks.

About Redfin

Redfin Corporation operates as a real estate brokerage company in the United States. The company operates an online real estate marketplace and provides real estate services, such as assisting individuals to purchase or sell their residential property. It also provides title and settlement services; originates and sells mortgages; and buys and sells residential properties. The company was formerly known as Appliance Computing Inc. and changed its name to Redfin Corporation in May 2006. Redfin Corporation was incorporated in 2002 and is headquartered in Seattle, Washington.

About Marriott Vacations Worldwide

Marriott Vacations Worldwide Corporation focuses on vacation ownership, based on number of owners, number of resorts and revenues. The Company is an exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Company operates through three segments North America, Europe and Asia Pacific. In the North America segment, it develops, markets, sells and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. Its Europe segment is engaged in selling its existing projects and managing existing resorts. Its Asia Pacific segment, it develops, markets, sells and manages two points-based programs that it designed to appeal to the vacation preferences of the market, Marriott Vacation Club, Asia Pacific and Marriott Vacation Club Destinations, Australia, as well as a weeks-based right-to-use product.



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