Check into Marriott Int'l

04/12/2017 2:50 am EST

Focus: INCOME

Elliott Gue

Editor and Publisher, Energy and Income Advisor and Capitalist Times

Marriot International (MAR) has rallied hard since the presidential election in anticipation of potential fiscal stimulus. 

More important, we continue to like the company's focus on franchising (52% of total rooms at the end of 2016) and management contracts (44%), which tends to result in superior profit margins and return on investment capital. 

The acquisition Starwood Hotels & Resorts Worldwide in September 2016 gives Marriott International a global luxury portfolio that complements its position in the US upscale market. 

And with a portfolio of appealing brands and one of the strongest loyalty programs, demand for new franchises and management contracts remains strong and should continue to drive growth in available rooms.

The favorable supply and demand balance that initially attracted us to Marriott International remains in place, while the business model should enable to the company to outpace industry growth and fend off competition from Airbnb and boutique hotels. MAR rates a buy on pullbacks below $90.

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