I have been doing a fair amount of traveling in the last month, with international trips to Turkey and Croatia and domestic trips to Kentucky and Texas. And what I have experienced is full airplanes and hefty prices for lodging, explains Chuck Carlson, editor of DRIP Investor.
In short, folks are hitting the road again, which should be a plus for companies involved in the travel business. Obviously, there are number of ways to play this travel trend, from airlines and cruise operators to hotel and lodging companies. Among these options, I’m leaning toward hotel and lodging companies. In that group, Marriott (MAR) has appeal.
The company operates over 8,000 properties under 30 brands, including JW Marriott, The Ritz-Carlton, W Hotels, St. Regis, Marriott Hotels, Sheraton, Westin, Le Meridien, Gaylord Hotels, Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, Aloft, and AC Hotels by Marriott.
Revenue and per-share profits should show good growth this year and next. The stock is still trading at a reasonable valuation of 20 times 2023 earnings estimates and at a 21% discount to its 52-week high.
To be sure, hotels will likely continue to have staffing problems, and it is likely labor costs will be increasing. But I do think consumer demand will remain steady during this economic downturn as a result of pent-up demand for travel.
Marriott offers a direct-purchase plan whereby any investor may buy the first share and every share directly. Minimum initial investment is $350. The plan administrator is Computershare. For enrollment information call (800) 311-4816 or visit www.computershare.com.