[ad_1]
The hotel industry is focused on the provision of short-term lodging, including hotels and motels, as well as accommodation-related services. It’s one segment within the broader hospitality, or leisure, industry. The hotel industry is split into two main categories of companies: C-corporation hotels, such as Marriott International Inc. (MAR) and Hilton Worldwide Holdings Inc. (HLT); and hotel real estate investment trusts (REITs), like DiamondRock Hospitality Co. (DRH) and Park Hotels & Resorts Inc. (PK).
The hotel industry has been severely affected by the COVID-19 pandemic and its resulting travel and dining restrictions, and other social-distancing rules.
C-corp hotels generally are engaged in hotel management, branding and marketing, and sometimes franchise licensing. They often own little real estate and their legal structure requires them to pay corporate taxes on dividends. These hotel stocks are best represented by the S&P 1500 Hotels Restaurants & Leisure Industry Index, which had a total return over the past year of 49.0%, as of June 11, 2021.
Hotel REITs, on the other hand, are companies that focus more on the acquisition, ownership, and operation of hotel real estate. Some REITs even manage the hotels they own. They are legally structured in a way that exempts them from paying taxes on distributed dividends, but they must distribute 90% of their taxable income to shareholders in order to be eligible as a REIT. These hotel REITs are best represented by the S&P 1500 Hotel & Resort REITs Sub-Industry Index, which had a total return of 46.2% over the past year.
Both hotel stocks and hotel REITs, represented by their respective indexes, have outperformed the broader market over the past year with total returns above the Russell 1000’s total return of 44.2%, as of June 11, 2021. All statistics in the tables below are as of June 11 for the hotel stocks and June 10 for the hotel REITs (note that the Russell 1000’s total return as of June 10 was 37.2% for comparison with the hotel REITs).
In the first half of this story we look at the top 3 hotel stocks with: the best value, the fastest growth, and the most momentum. In the second half, we examine the top 3 hotel REITs with: the best value, the fastest growth, and the most momentum. Because the hotel industry has suffered severely from the impact of the COVID-19 pandemic this year, many companies have not been profitable. Thus, we use the price-to-sales ratio to determine the best value stocks and sales growth to determine the fastest growth stocks.
These are the hotel stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you’re paying for the stock for each dollar of sales generated.
| Best Value Hotel Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/S Ratio | |
| Hyatt Hotels Corp. ( H) |
81.86 | 8.3 | 5.5 |
| Marriott International Inc. (MAR) | 143.48 | 46.7 | 5.7 |
| Wyndham Hotels & Resorts Inc. ( WH) |
75.45 | 7.0 | 5.9 |
Source: YCharts
- Hyatt Hotels Corp.: Hyatt Hotels is a multinational hospitality company that develops and manages branded hotels, resorts, and residential and vacation ownership properties.
- Marriott International Inc.: Marriott International owns and operates hotels, motels, and timeshare properties worldwide. The company announced in May financial results for Q1 of its 2021 fiscal year (FY), the three-month period ended March 31, 2021. Marriott posted a net loss of $11 million, a significant deterioration of its bottom line from net income of $31 million reported in the year-ago quarter. Revenue fell 50.5%. The company said its results were adversely impacted by the pandemic and measures to contain the virus, but that it started to see improvements in demand during the quarter.
- Wyndham Hotels & Resorts Inc.: Wyndham Hotels & Resorts owns and operates a hotel and resort chain. It offers amenities, resorts, meetings and events spaces, wedding venues, and more.
These are the hotel stocks with the highest year-over-year (YOY) sales growth or least sales decline for the most recent quarter. A company’s ability to maintain sales in a difficult business environment can be a sign of good management and/or a strong business model.
| Hotel Stocks With the Most Sales Growth or Least Sales Decline | |||
|---|---|---|---|
| Price ($) | Market Value ($B) | Revenue Growth (%) | |
| Huazhu Group Ltd. ( HTHT) |
56.82 | 18.3 | 24.4 |
| GreenTree Hospitality Group Ltd. ( GHG) |
15.29 | 1.6 | 6.4 |
| Choice Hotels International Inc. ( CHH) |
123.05 | 6.8 | -16.2 |
Source: YCharts
- Huazhu Group Ltd.: Huazhu Group is a China-based hotel management company that provides hotel leasing, hotel operation, and co-development services. The company announced in late April the appointment of Chief Compliance Officer Hui Chen to the role of chief financial officer (CFO), effective May 10, 2021. Chen replaces Teo Nee Chuan, who was set to resign for personal reasons on May 10.
- GreenTree Hospitality Group Ltd.: GreenTree Hospitality is a China-based holding company engaged in the hospitality business. It specializes in managing and operating franchised hotels in China. It also provides guest houses, board rooms, banquet halls, wedding venues, and more.
- Choice Hotels International Inc.: Choice Hotels International is a hotel franchising company with over 7,100 franchises with almost 600,000 rooms across more than 40 countries and territories. It has a dozen different lodging brands including Quality Inn, EconoLodge, and Cambria Hotels. On May 7, 2021, it reinstated its dividend and share buyback program, with CEO Patrick Pacious saying that it “reflects the Board’s confidence in the company’s current liquidity position and outlook.”
These are the hotel stocks that had the highest total return over the last 12 months.
| Hotel Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Wyndham Hotels & Resorts Inc. (WH) | 75.45 | 7.0 | 72.8 |
| Hilton Worldwide Holdings Inc. (HLT) | 128.61 | 35.8 | 65.8 |
| Huazhu Group Ltd. (HTHT) | 56.82 | 18.3 | 58.1 |
| Russell 1000 | N/A | N/A | 44.2 |
| S&P 1500 Hotels Restaurants & Leisure Industry Index | N/A | N/A | 49.0 |
Source: YCharts
- Wyndham Hotels & Resorts Inc.: See above for company description.
- Hilton Worldwide Holdings Inc.: Hilton Worldwide Holdings is a holding company that, through its subsidiaries, provides hospitality services. It owns and manages hotels, resorts, and timeshare properties in various regions throughout the world. The company announced in early May financial results for Q1 FY 2021, which ended March 31, 2021. Hilton posted a net loss of $109 million, a significant change from net income of $18 million reported in the year-ago quarter. Revenue fell 54.5%. The company said that rising cases of COVID-19 and tightened travel restrictions, especially across Europe and the Asia Pacific region, weakened demand in January and February 2021. However, demand began to improve in March and April.
- Huazhu Group Ltd.: See above for company description.
These are the hotel REITs with the lowest 12-month trailing price-to-sales (P/S) ratio. As mentioned above, for companies in early stages of development or industries suffering from major shocks, the price-to-sales ratio can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you’re paying for the stock for each dollar of sales generated.
| Best Value Hotel REITs | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/S Ratio | |
| Ashford Hospitality Trust Inc. ( AHT) |
6.28 | 1.2 | 0.8 |
| Braemar Hotels & Resorts Inc. ( BHR) |
6.46 | 0.3 | 1.2 |
| CorePoint Lodging Inc. ( CPLG) |
10.37 | 0.6 | 1.6 |
Source: YCharts
- Ashford Hospitality Trust Inc.: Ashford Hospitality Trust is a REIT whose geographically diversified portfolio mainly consists of dominant branded, upscale, full-service and select-service hotels.
- Braemar Hotels & Resorts Inc.: Braemar Hotels & Resorts is a REIT that primarily invests in full-service luxury hotels and resorts. It seeks to acquire both premium branded and independent hotels. The company recently announced a deal to acquire the 138-room Mr. C Beverly Hills Hotel in Los Angeles, California for a price per key of $474,000. Price per key, a key metric in the commercial real estate industry, is equivalent to price per room. The acquisition is expected to close on or before July 9, 2021.
- CorePoint Lodging Inc.: CorePoint Lodging is a REIT focused on midscale and upper-midscale select-service hotels. Its portfolio includes hotels located near employment centers, airports, and major travel thoroughfares.
These are the hotel REITs with the highest year-over-year (YOY) sales growth or least sales decline for the most recent quarter. As mentioned above, a company’s ability to maintain sales in a difficult business environment can be a sign of good management and/or a strong business model.
| Hotel REITs With the Most Sales Growth or Least Sales Decline | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | Revenue Growth (%) | |
| Four Corners Property Trust Inc. ( FCPT) |
28.96 | 2.2 | 10.2 |
| Braemar Hotels & Resorts Inc. (BHR) | 6.46 | 0.3 | -28.7 |
| Apple Hospitality REIT Inc. ( APLE) |
16.17 | 3.6 | -33.3 |
Source: YCharts
- Four Corners Property Trust Inc.: Four Corners Property Trust is a REIT that owns and leases properties for use by restaurants, food services, and other types of retail properties. The company announced in late April financial results for Q1 FY 2021, which ended March 31, 2021. Net income rose 6.7% on revenue growth of 10.2%. Four Corners noted that it acquired an additional 13 properties with a combined purchase price of $33.9 million during the quarter.
- Braemar Hotels & Resorts Inc.: See above for company description.
- Apple Hospitality REIT Inc.: Apple Hospitality REIT owns a large, diversified portfolio of upscale, hotels in the U.S., focusing on leading brands such as Marriott, Hilton, and Hyatt. Apple Hospitality announced in early May financial results for Q1 FY 2021, which ended March 31, 2021. Its net loss widened to $46.4 million from $2.8 million in the year-ago quarter as revenue fell 33.3%.
These are the hotel REITs that had the highest total return over the last 12 months.
| Hotel REITs with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| CorePoint Lodging Inc. (CPLG) | 10.37 | 0.6 | 124.9 |
| Ryman Hospitality Properties Inc. ( RHP) |
78.25 | 4.3 | 96.4 |
| Xenia Hotels & Resorts Inc. ( XHR) |
20.46 | 2.3 | 75.0 |
| Russell 1000 | N/A | N/A | 37.2 |
| S&P 1500 Hotel & Resort REITs Sub-Industry Index | N/A | N/A | 46.2 |
Source: YCharts
- CorePoint Lodging Inc.: See above for company description.
- Ryman Hospitality Properties Inc.: Ryman Hospitality Properties is a REIT that owns and operates group-oriented, destination hotel properties in urban and resort markets. It specializes in upscale convention center resorts and country music entertainment experiences. Ryman announced in early May financial results for Q1 FY 2021, which ended March 31, 2021. Its net more than doubled to $104.5 million from $46.5 million in the year-ago quarter. Revenue declined 73.1%. Despite the poor results, the company said that it was seeing improving market conditions stemming from the U.S. COVID-19 vaccine rollout in the U.S., as well as increasing consumer confidence.
- Xenia Hotels & Resorts Inc.: Xenia Hotels & Resorts is a REIT that owns a diversified portfolio of luxury and upper upscale hotels and resorts operated by major brands, including Marriott, Hyatt, Kimpton, Fairmont, Loews, and Hilton.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
[ad_2]
Source link
/shutterstock_334074959_stock_trade_mobile-5bfc32724cedfd0026c25a3a.jpg)
/76314589-5bfc2de546e0fb00265c599d.jpg)
/GettyImages-1308661868-7facac62f1684ea3ba47adceccbd709b.jpg)
/shutterstock_238811065_labor_day_women_union_parade-5bfc3f444cedfd0026c5e73f.jpg)
/GettyImages-112260467-479cdfb54c484e6893648d0b99604412.jpg)