This hotel’s transition to a more upscale environment is paying off in rising sales and earnings. And we have an update on Ecolab, Inc., recommended in our October 2013 issue.
Marriott International Inc. (MAR)
from Blue Chip Growth
Marriott International Inc. (MAR) is a familiar name to travelers. The company’s properties cover the full spectrum of luxury (The Ritz-Carlton and BVGARI) to economy (Courtyard and Springhill Suites). Marriott also offers travelers extended stay accommodations (Residence Inn and Towneplace Suites) and destination entertainment options (Gaylord Hotels and Marriott Vacation Club).
Outside of hotels and timeshares, the company operates, markets, and develops residential properties, as well as provides services to home/condominium owner associations. At last count, Marriott had approximately 4,000 properties and 690,000 rooms in 77 countries and territories.
The company is increasingly moving upscale, especially with its Autograph Collection properties. Marriott International recently struck a franchise agreement with the owners of the Atlantis resort in the Bahamas; in exchange for a $100 million loan to Brookfield Asset Management, Atlantis will join Marriott’s Autograph Collection. Over the next several years, Marriott plans on adding 200 new hotels, 25% of which will likely be luxury hotels.
This is expected to generate rich returns for Marriott. For its upcoming earnings report on July 29, the analyst community is forecasting 8% annual sales growth and 17.5% earnings growth. Given the company’s solid track record of double-digit earnings surprises, I expect this to be another headline-making announcement.
Beyond that, Marriott is expected to post double-digit earnings growth over the next several quarters. The stock also yields a solid 1.24% and we’ll likely see another dividend declared shortly following the earnings announcement. In the meantime, I recommend you buy shares of this Conservative stock up to $69.
Louis Navellier, Blue Chip Growth, www.bluechipgrowth.com, 800-718-8289, August 2014