Should Hilton have a room in your portfolio?
Hilton Worldwide's stock saw an 8-percent rise upon its return to the markets on Thursday, but its large asset holdings and better-valued competitors could undermine its long term potential, two hotel industry analysts told CNBC.
Rod Petrik, a lodging analyst with Stifel Nicolaus, said Hilton's $20 initial public offering price—the largest hotel IPO ever—seemed deserved, and he saw potential for revenue-per-available-room growth. But because of Hilton's debt and other drags, Starwood Hotels & Resorts Worldwide represents a better value, Petrik said in a research note Thursday.
Chad Mollman, a travel and leisure analyst with Morningstar, said he doesn't agree with the IPO valuation.
(Read more: Shares of Hilton open at $21.30 in IPO)
He said Hilton still receives a significant amount of cash flow from hotels it owns, which drive high capital costs and don't represent a growth business. Mollman said the IPO valuation represents a 20-percent premium compared to the average global hotel operator.
"We think the offering price is basically valuing the entire company as a management-franchise company, when they have a pretty high percentage of cash flow coming from owned hotels," Mollman said on CNBC's "Squawk on the Street."
Hilton CEO Chris Nassetta told CNBC in a later interview that the company plans to hold on to its physical assets in the near term in order to "mine value" from real estate. He said Hilton was the "fastest growing major hotel company" and that the company plans to become "investment grade" in two to three years.
(Read more: Welcome to the Hotel Hilton)
"We like having the hard assets together with the management franchise business," Nassetta said on "Squawk on the Street." "At this point in the cycle there is huge embedded growth opportunities in the real estate.The longer term? It's not clear."
(Watch: Hilton on par with Marriott: Pro)
Nasetta said his company drove down its debt load since Blackstone bought the hotel chain in 2007, adding that the private equity firm won't sell its controlling shares of Hilton any time soon.
"My sense is they're not in a rush to do it," Nasetta said.
— By CNBC's Jeff Morganteen. Follow him on Twitter at
@jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this report.