Summer is known as the vacation season. The kids are out of school, adults can take the time to take a few days off work, and the nice weather is a perfect motivator to get out and do something.
These are the key reasons that make summertime the busiest travel season of the year–people have time to do it. And with so many people wanting to take the time to head to their favorite vacation spot or visit friends and family out-of-town, transportation and lodging companies LOVE the season.
Nowadays people like to turn to businesses that let them make travel arrangements in the easiest, fastest and cheapest way possible. That’s why online travel agencies like Priceline.com (NASDAQ:PCLN) and Expedia Inc. (NASDAQ:EXPE) have become so popular. With just a few clicks, you can order airline tickets, rent a car and book a hotel room, all on the same site.
These online sites have revolutionized the traveling industry, but they are not as similar as they appear. The important differences emerge when you put them head-to-head and make them fight it out for which one is the better buy. Let’s take a look at the facts:
Smackdown #1: Priceline vs. Expedia
Priceline (NASDAQ:PCLN) was one of the first in a slew of companies to take advantage of the online travel business. Through its website, Priceline allows customers to search for and book rooms at thousands of lodging accommodations throughout the world, compare and book flights from competing airlines and place car rentals.
The site has gained tremendous popularity thanks to its aggressive advertising campaigns, variety of services and the option for customers to negotiate prices. In the last five years, the stock has gained more than 57%, with growth estimates topping 50% for this year as well. Even with recent lags in the travel industry, Priceline has managed to expand thanks to the cheap prices it affords hopeful travelers. And its fundamentals continue to grow stronger, which indicate long-term success for the position.
Now let’s take a look at Expedia Inc. (NASDAQ:EXPE). The company offers many of the same services as its opponent, Priceline, including airfare, lodging options, car rentals and even cruise options. Expedia also offers domestic and international travel options.
Through all its subsidiaries, the company operates several well-known and successful travel brands including, Expedia.com, hotels.com and hotwire.com. Like Priceline, the company was able to profit during the lull in the travel industry thanks to cheap prices and strength in its international business. However, the stock has not performed quite as consistently as PCLN, and its fundamentals prove a little choppy.
Priceline has the stronger fundamentals, the better earnings history and the buying pressure that make it a strong buy all day long. Expedia still ranks a buy in my grading system, but only one stock can win the smackdown. And the overwhelming winner is Priceline.
