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3 Hotel Industry Stocks That Will Enhance Your Portfolio
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So far, 2017 has been welcoming for the U.S. hotel industry with moderate demand growth supporting increases in both occupancy and average daily rate (ADR). Resultantly, revenue per available room (RevPAR) witnessed a rise of 3.4% and 2.7%, respectively, in the first two quarters.
This is further reflected in the industry’s stock-price performance. The Zacks Hotels and Motels Industry has fared better than the broader S&P 500 index over the past six months. While the industry gained 15.8%, the broader index has added only 7.5%.
Rising employment, higher real income and increased household net worth has reinforced consumer confidence and sentiment. Thereby, resulting in a steady rise in business and leisure travel and higher transaction volumes, which are likely to continue. This, in turn, is expected to keep the momentum alive.
However, peaking supply growth continues to be a meaningful downside risk and is anticipated to put pressure on pricing power, thereby tempering the performance somewhat. Then again, the so-called “Trump Slump” in travel along with macroeconomic concerns in several emerging economies might keep the hotel chain’s growth under check.
Nevertheless, consumer and business spending are expected to keep the mood upbeat, suggesting that the U.S. economy will remain on solid footing, going forward. Also, as people are steadfast on spending time with loved ones and keep looking for unique experiences at all price points, hoteliers believe that their diverse portfolio of travel offerings can continue to deliver on that growing demand.
Overall, despite the ongoing economic and political uncertainty, economic fundamentals appear strong enough to support more modest growth in the hotel space in the short-to-medium term without any additional stimulus.
Three Stocks to Bet On
Given this scenario, we zeroed in on three stocks from the Hotels & Motels industry that are well positioned in today’s market environment and could see considerable upside, riding on the positive trends across the industry.
The stocks below carry a favorable rank and can prove lucrative additions to your portfolio.
Marriott International Inc. (MAR - Free Report) became the world's largest hotel company with the acquisition of Starwood. In fact, this buyout is likely to result in a bigger brand with increased scale and a robust development pipeline in the long run. Marriott’s rising North-American business, sizeable international exposure and an attractive brand-position are likely to continue driving growth. Its investments in technology for hotel bookings are also anticipated to improve guest experience, which in turn might boost occupancy.
In the last six months, the stock has gained 17.6%. Additionally, Marriott has been seeing an upward trend in earnings estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for 2017 and 2018 earnings have increased 2.4% and 2.1%, respectively. Also, this Zacks Rank #2 (Buy) company delivered positive earnings surprises in each of the trailing four quarters, with an average beat of 9.11%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per the Zacks Consensus Estimate, sales are projected to grow 32.9% and 5% on year-over-year basis, in 2017 and 2018, respectively. Meanwhile, earnings are expected to improve 11% in 2017 and 13.1% in 2018.
Choice Hotels International, Inc. (CHH - Free Report) is one of the largest hotel franchise companies in the world. It has hotels, inns, all-suite hotels and resorts open and under development in countries across the globe under various brands. This Zacks Rank #2 company’s loyalty program, Choice Privileges, is rapidly expanding and continues to drive guest to its franchisees’ hotels.
The stock has rallied 18.3% in the last six months. The Zacks Consensus Estimate for 2017 earnings inched up 1.4% in the last 60 days and 1.9% for 2018. Also, Choice Hotels pulled off positive earnings surprises in each of the trailing four quarters, with an average beat of 3.41%.
Per the Zacks Consensus Estimate, sales are projected to grow by 7.8% in 2017 and 5.5% in 2018, on year-over-year basis. Earnings are anticipated to rise 16% and 10.6% in 2017 and 2018, respectively.
Leading hospitality company, Hilton Worldwide Holdings Inc. (HLT - Free Report) has transformed into a capital-light operating business with the spin-off of a portfolio of hotels and resorts as well as its timeshare business. Hilton’s scale, size, commercial platform and industry-leading brands continue to drive unit growth. Also, this Zacks Rank #2 company’s industry-leading loyalty program continues to boost occupancy.
Interestingly, the stock was up 17.5% over the last six months. Upward estimate revisions further add to the optimism. The Zacks Consensus Estimate for 2017 and 2018 earnings have moved up 3.8% and 3.2%, respectively, over the last 60 days. Moreover, the company’s earnings surpassed the consensus mark in each of the last four quarters, with an average beat of 19.18%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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3 Hotel Industry Stocks That Will Enhance Your Portfolio
So far, 2017 has been welcoming for the U.S. hotel industry with moderate demand growth supporting increases in both occupancy and average daily rate (ADR). Resultantly, revenue per available room (RevPAR) witnessed a rise of 3.4% and 2.7%, respectively, in the first two quarters.
This is further reflected in the industry’s stock-price performance. The Zacks Hotels and Motels Industry has fared better than the broader S&P 500 index over the past six months. While the industry gained 15.8%, the broader index has added only 7.5%.
Rising employment, higher real income and increased household net worth has reinforced consumer confidence and sentiment. Thereby, resulting in a steady rise in business and leisure travel and higher transaction volumes, which are likely to continue. This, in turn, is expected to keep the momentum alive.
However, peaking supply growth continues to be a meaningful downside risk and is anticipated to put pressure on pricing power, thereby tempering the performance somewhat. Then again, the so-called “Trump Slump” in travel along with macroeconomic concerns in several emerging economies might keep the hotel chain’s growth under check.
Nevertheless, consumer and business spending are expected to keep the mood upbeat, suggesting that the U.S. economy will remain on solid footing, going forward. Also, as people are steadfast on spending time with loved ones and keep looking for unique experiences at all price points, hoteliers believe that their diverse portfolio of travel offerings can continue to deliver on that growing demand.
Overall, despite the ongoing economic and political uncertainty, economic fundamentals appear strong enough to support more modest growth in the hotel space in the short-to-medium term without any additional stimulus.
Three Stocks to Bet On
Given this scenario, we zeroed in on three stocks from the Hotels & Motels industry that are well positioned in today’s market environment and could see considerable upside, riding on the positive trends across the industry.
The stocks below carry a favorable rank and can prove lucrative additions to your portfolio.
Marriott International Inc. (MAR - Free Report) became the world's largest hotel company with the acquisition of Starwood. In fact, this buyout is likely to result in a bigger brand with increased scale and a robust development pipeline in the long run. Marriott’s rising North-American business, sizeable international exposure and an attractive brand-position are likely to continue driving growth. Its investments in technology for hotel bookings are also anticipated to improve guest experience, which in turn might boost occupancy.
In the last six months, the stock has gained 17.6%. Additionally, Marriott has been seeing an upward trend in earnings estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for 2017 and 2018 earnings have increased 2.4% and 2.1%, respectively. Also, this Zacks Rank #2 (Buy) company delivered positive earnings surprises in each of the trailing four quarters, with an average beat of 9.11%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per the Zacks Consensus Estimate, sales are projected to grow 32.9% and 5% on year-over-year basis, in 2017 and 2018, respectively. Meanwhile, earnings are expected to improve 11% in 2017 and 13.1% in 2018.
Choice Hotels International, Inc. (CHH - Free Report) is one of the largest hotel franchise companies in the world. It has hotels, inns, all-suite hotels and resorts open and under development in countries across the globe under various brands. This Zacks Rank #2 company’s loyalty program, Choice Privileges, is rapidly expanding and continues to drive guest to its franchisees’ hotels.
The stock has rallied 18.3% in the last six months. The Zacks Consensus Estimate for 2017 earnings inched up 1.4% in the last 60 days and 1.9% for 2018. Also, Choice Hotels pulled off positive earnings surprises in each of the trailing four quarters, with an average beat of 3.41%.
Per the Zacks Consensus Estimate, sales are projected to grow by 7.8% in 2017 and 5.5% in 2018, on year-over-year basis. Earnings are anticipated to rise 16% and 10.6% in 2017 and 2018, respectively.
Leading hospitality company, Hilton Worldwide Holdings Inc. (HLT - Free Report) has transformed into a capital-light operating business with the spin-off of a portfolio of hotels and resorts as well as its timeshare business. Hilton’s scale, size, commercial platform and industry-leading brands continue to drive unit growth. Also, this Zacks Rank #2 company’s industry-leading loyalty program continues to boost occupancy.
Interestingly, the stock was up 17.5% over the last six months. Upward estimate revisions further add to the optimism. The Zacks Consensus Estimate for 2017 and 2018 earnings have moved up 3.8% and 3.2%, respectively, over the last 60 days. Moreover, the company’s earnings surpassed the consensus mark in each of the last four quarters, with an average beat of 19.18%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>