Marriott Vacations is a timeshare company which manages 59 resorts with about 420,000 owners and member worldwide. Its brands include Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott.
It was spun off from Marriott International in 2011.
Raised Full Year Guidance
On Oct 16, Marriott Vacations reported third quarter results. It actually missed on the Zacks Consensus by a penny, however, it raised and narrowed full year guidance to a range of $2.67- $2.84 from $2.64- $2.82.
The analysts responded by raising estimates to get in line with the new guidance.
The 2014 Zacks Consensus Estimate rose to $2.82 from $2.73 since the report. That’s earnings growth of 22.2%.
Double digit earnings growth is also expected for 2015 with analysts expecting another 12.5% rise in earnings.
Company development margin rose to 21.5% from 21.1% a year ago with North America development margin rising even more, to 24.4% from 22.7%.
North American volumes per guest also rose 6.9% year over year to $3,477.
New Dividend Announced
On Oct 16, the company also announced that for the first time since its IPO in 2011, it would pay a dividend to shareholders.
The quarterly dividend would be $0.25, payable on Nov 12 to shareholders of record as of Oct 28. That’s a yield of 1.4%.
It’s not the first time that Marriott Vacations has given back to shareholders though.
It operates a share repurchase program of $186 million, which it has already virtually exhausted. The Board recently authorized an addition repurchase of up to 3.4 million shares, or about 10% of the company’s outstanding common stock.
Shares at All-Time Highs
If you had bought Marriott Vacations around the time of its IPO in 2011, you have been rewarded handsomely.
Shares recently hit another all-time high.
Shares are no longer cheap, with a forward P/E of 24, but fundamentals remain solid with double digit growth expected and the initiation of a dividend to shareholders.
For investors looking to get into the strong global travel market, Marriott Vacations is one stock to keep on your short list.
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