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Here's Why You Should Buy Wyndham (WYN) Stock Right Away
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Shares of Wyndham Worldwide Corporation have surged 63.9% in the past year, widely outpacing the S&P 500 index’s gain of 19.5%.
Meanwhile, the company has been witnessing upward revisions in its current-year and next-year estimates, over the past two months.
Given this Zacks Rank #2 (Buy) company’s solid progress on the fundamentals, we believe that this is the right time to add the stock to your portfolio as it is poised to carry the momentum ahead.
What Makes Wyndham a Solid Pick?
Solid Estimated Sales & EPS Growth: Wyndham’s current-year revenues are anticipated to grow 5% year over year, outpacing its industry’s projected average growth of just 2.8%.
Strong top-line growth is expected to translate to robust bottom-line performance as well. Consequently, the company’s current-year projected EPS growth is a healthy 7.8%
Arguably, nothing is more important than earnings growth as surging profit levels is often an indication of strong prospects (and stock price gains) ahead for the company in question.
Hotel Group Spin-Off a Positive: On Aug 3, 2017, Wyndham announced its plan to spin off the company's hotel business — Wyndham Hotel Group — resulting in two separate publicly traded companies. The transaction is expected to be completed in the first half of 2018.
Notably, the company believes that the spin-off of its Hotel Group business and the combination of Vacation Ownership segment with RCI is the best structure to unlock shareholder value and enable strong long-term growth across the businesses.
In fact, this transaction is anticipated to increase the fit, focus, and strategic flexibility of the post spin-off companies, facilitate prospective capital raising and position them to better respond to developments in their respective markets.
Superior Return on Equity: Wyndham delivered return on equity (ROE) of a whopping 91.2% in the trailing 12 months compared with the industry’s average of just 7.3%. This supports its growth potential and indicates that the hospitality giant reinvests more efficiently compared with its peers.
Favorable VGM Score: Wyndham has a VGM Score of A. Our VGM Score identifies stocks that have the most attractive value, growth and momentum characteristics. In fact, our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 make solid investment choices.
Stable Returns to Shareholders: Wyndham is consistently rewarding shareholders through repurchases and dividends. Ever since the initiation of its share repurchase program in 2007, the company has expanded the same by seven times and bought back $4.5 billion worth of shares.
Furthermore, the company’s ongoing dividend policy is likely to grow its dividend at least at the rate of its earnings growth. Currently, Wyndham has a payout ratio of 36.6%. Also, it has a dividend yield of 2.1%, which is higher than the industry average of 1.1%. We appreciate the company’s efforts to consistently enhance shareholder returns.
In the trailing four quarters, Malibu Boats, Polaris and Planet Fitness pulled off an average positive earnings surprise of 6.01%, 7.07% and 15.72%, respectively.
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Here's Why You Should Buy Wyndham (WYN) Stock Right Away
Shares of Wyndham Worldwide Corporation have surged 63.9% in the past year, widely outpacing the S&P 500 index’s gain of 19.5%.
Meanwhile, the company has been witnessing upward revisions in its current-year and next-year estimates, over the past two months.
Given this Zacks Rank #2 (Buy) company’s solid progress on the fundamentals, we believe that this is the right time to add the stock to your portfolio as it is poised to carry the momentum ahead.
What Makes Wyndham a Solid Pick?
Solid Estimated Sales & EPS Growth: Wyndham’s current-year revenues are anticipated to grow 5% year over year, outpacing its industry’s projected average growth of just 2.8%.
Strong top-line growth is expected to translate to robust bottom-line performance as well. Consequently, the company’s current-year projected EPS growth is a healthy 7.8%
Arguably, nothing is more important than earnings growth as surging profit levels is often an indication of strong prospects (and stock price gains) ahead for the company in question.
Hotel Group Spin-Off a Positive: On Aug 3, 2017, Wyndham announced its plan to spin off the company's hotel business — Wyndham Hotel Group — resulting in two separate publicly traded companies. The transaction is expected to be completed in the first half of 2018.
Notably, the company believes that the spin-off of its Hotel Group business and the combination of Vacation Ownership segment with RCI is the best structure to unlock shareholder value and enable strong long-term growth across the businesses.
In fact, this transaction is anticipated to increase the fit, focus, and strategic flexibility of the post spin-off companies, facilitate prospective capital raising and position them to better respond to developments in their respective markets.
Superior Return on Equity: Wyndham delivered return on equity (ROE) of a whopping 91.2% in the trailing 12 months compared with the industry’s average of just 7.3%. This supports its growth potential and indicates that the hospitality giant reinvests more efficiently compared with its peers.
Favorable VGM Score: Wyndham has a VGM Score of A. Our VGM Score identifies stocks that have the most attractive value, growth and momentum characteristics. In fact, our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 make solid investment choices.
Stable Returns to Shareholders: Wyndham is consistently rewarding shareholders through repurchases and dividends. Ever since the initiation of its share repurchase program in 2007, the company has expanded the same by seven times and bought back $4.5 billion worth of shares.
Furthermore, the company’s ongoing dividend policy is likely to grow its dividend at least at the rate of its earnings growth. Currently, Wyndham has a payout ratio of 36.6%. Also, it has a dividend yield of 2.1%, which is higher than the industry average of 1.1%. We appreciate the company’s efforts to consistently enhance shareholder returns.
Key Picks
Some other top-ranked stocks in the same sector include Malibu Boats, Inc. (MBUU - Free Report) , Polaris Industries Inc. (PII - Free Report) and Planet Fitness, Inc. (PLNT - Free Report) . While Malibu Boats flaunts a Zacks Rank #1, Polaris and Planet Fitness carry the same bullish rank as Wyndham. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the trailing four quarters, Malibu Boats, Polaris and Planet Fitness pulled off an average positive earnings surprise of 6.01%, 7.07% and 15.72%, respectively.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
See these buy recommendations now >>