Financial Analysis: Reading International (RDI) & ILG (ILG)

Reading International (NASDAQ: RDI) and ILG (NASDAQ:ILG) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Dividends

ILG pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Reading International does not pay a dividend. ILG pays out 57.7% of its earnings in the form of a dividend.

Profitability

This table compares Reading International and ILG’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Reading International 9.36% 9.86% 3.84%
ILG 7.32% 11.41% 5.50%

Earnings and Valuation

This table compares Reading International and ILG’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Reading International $280.63 million 1.29 $54.47 million $1.12 14.01
ILG $1.34 billion 2.50 $314.00 million $1.04 25.78

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

Volatility and Risk

Reading International has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, ILG has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Reading International and ILG, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reading International 0 0 1 0 3.00
ILG 0 0 5 0 3.00

Reading International presently has a consensus target price of $26.50, suggesting a potential upside of 68.90%. ILG has a consensus target price of $26.20, suggesting a potential downside of 2.28%. Given Reading International’s higher possible upside, equities research analysts clearly believe Reading International is more favorable than ILG.

Insider & Institutional Ownership

31.7% of Reading International shares are owned by institutional investors. Comparatively, 81.0% of ILG shares are owned by institutional investors. 26.8% of Reading International shares are owned by company insiders. Comparatively, 2.0% of ILG shares are owned by company 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.

Summary

ILG beats Reading International on 10 of the 15 factors compared between the two stocks.

About Reading International

Reading International, Inc. (RDI) is engaged in the development, ownership and operation of multiplex cinemas in the United States, Australia, and New Zealand, and the development, ownership and operation of retail and commercial real estate in the United States, Australia and New Zealand. RDI operates through two segments: cinema exhibition and real estate. The cinema exhibition segment operates multiplex cinemas. RDI’s real estate segment includes real estate development and the rental of retail, commercial and live theater assets. The Company manages its cinema exhibition businesses around the world under various brands, including Reading Cinema, Angelika Film Centers, Consolidated Theatres and City Cinemas brands in the United States; under the Reading Cinema brand in Australia, and under the Reading Cinema and Rialto brands in New Zealand.

About ILG

ILG, Inc., formerly Interval Leisure Group, Inc., is a provider of professionally delivered vacation experiences. The Company is a global licensee for the Hyatt, Westin and Sheraton brands in vacation ownership. The Company operates through two segments: Exchange and Rental, and Vacation Ownership. Its Exchange and Rental segment offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and operating vacation rental properties. Its Vacation Ownership segment engages in the management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests, and related services to owners and associations. The Company offers leisure and travel-related products and services to owners of vacation interests and others primarily through various membership programs, as well as related services to resort developer clients.

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