Marriott International, Inc. recently delighted investors by augmenting its quarterly cash dividend payments by a noteworthy 21.2%.
The board of directors of this renowned hospitality establishment approved a hike from 52 cents to 63 cents per share quarterly (equivalent to $2.08 to $2.52 per share annually). Shareholders of record as of May 24 will receive the enhanced dividend on Jun 28, 2024. As of May 10, at a closing price of $240.46 per share, the stock offers a 1% dividend yield and a payout ratio of 0.3%.
The decision to elevate the dividend was propelled by a robust balance sheet and successful capital allocation endeavors.
Driving Forces Behind the Dividend Adjustment
Marriott focuses on effective capital allocation strategies to nurture its growth opportunities. By identifying growth avenues beneficial to its shareholders, the company prioritizes investing in them. Marriott employs a blend of incremental cash dividends and share buybacks to reward its shareholders with excess capital.
In the first quarter of 2024, Marriott reported an adjusted earnings per share (EPS) of $2.13, indicating a 1.9% rise from the previous year’s $2.09. This uptick was spurred by Marriott’s capital allocation strategy, encompassing a commitment to maintaining an investment-grade rating and investing in growth possibilities.
Additionally, a positive trajectory in international market demand, expansion endeavors, a robust loyalty program, and an asset-light business model contribute to Marriott’s business enhancement. Despite challenges such as high costs, the company’s focus on capitalizing on revenue growth and channeling excess capital into lucrative growth prospects is yielding favorable outcomes.
For 2024, Marriott has revised its adjusted EPS forecast to range between $9.31 and $9.65, up from the prior forecast of $9.18 to $9.52, primarily due to anticipated higher incentive management fees from its international segments.
Shares of Marriott, currently a Zacks Rank #3 (Hold) entity, have surged by 36.4% over the past year, outshining the Hotels and Motels industry’s 29.7% growth.
Promising Selections
Here are some well-regarded stocks from the Consumer Discretionary sector:
Strategic Education, Inc., holding a Zacks Rank #1 (Strong Buy), boasts a four-quarter average earnings surpass of 36.2% and has witnessed a 50.2% surge in the past year. Projections for 2024 indicate a 6% rise in sales and a 32% increase in EPS compared to the previous year.
Netflix, Inc., currently with a Zacks Rank #1, has shown an average four-quarter earnings surprise of 9.3% and has experienced an 81.5% upsurge in the past year. Forecasts for 2024 suggest a 14.7% increase in sales and a 52.1% spike in EPS over the prior year.
Royal Caribbean Cruises Ltd., also carrying a Zacks Rank #1, has recorded an average four-quarter earnings beat of 18.3% and a remarkable 86.6% rise in stock value in the last year. Expectations for 2024 entail a 16.9% revenue growth and a 59.5% surge in EPS from the previous year.
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