Investors are often driven by the idea of discovering the “next big thing”, even if it means buying “historic stocks” that don’t generate any income, let alone profit. But, as Peter Lynch said in One Up On Wall Street, “Vision almost never pays off.”
So, if this high-risk, high-reward idea isn’t for you, you might be more interested in a profitable, growing company like Marriott Vacations Worldwide (NYSE:VAC). Even if the company receives a fair market valuation, investors will agree that sustained earnings will continue to provide Marriott with the means to deliver long-term shareholder value.
Investors and investment funds are chasing earnings, which means that stock prices tend to rise with positive earnings per share (EPS). This is why EPS is so bullish. Marriott International increased its earnings per share from $3.16 to $11.41 in just one year, which is quite a feat. While this growth rate may not be repeated, it looks like a breakthrough.
It is often helpful to look at earnings before interest and taxes (EBIT) as well as revenue growth to get another look at the quality of a company’s growth. Our analysis shows that Marriott International’s operating income does not include all of its revenue over the last 12 months, so our analysis of its margins may not accurately reflect its core business. To the delight of Marriott Vacations’ global shareholders, EBIT margins have risen from 20% to 24% over the past 12 months, and revenue is trending higher as well. In both cases, it’s nice to see that.
You can take a look at the company’s revenue and earnings growth trends as shown in the chart below. To see real numbers, click on the graph.
Fortunately, we have access to analyst forecasts for Marriott Vacations Worldwide’s future earnings. You can make a forecast yourself without looking, or you can look at the forecasts of professionals.
Investors feel safe if insiders also own shares of the company, thereby aligning their interests. Shareholders will be thrilled that insiders own a significant amount of Marriott Vacations Worldwide stock. In fact, they have invested a significant fortune which currently stands at $103 million. Investors will appreciate that management is so interested in the game as it demonstrates their commitment to the future of the company.
It’s great to see insiders investing in the company, but are the pay levels reasonable? Our brief analysis of the CEO salary seems to suggest that this is the case. For companies with market caps between $200 million and $6.4 billion, such as Marriott Vacations Worldwide, the median CEO compensation is around $6.8 million.
Through December 2022, the CEO of Marriott Vacations Worldwide received a compensation package totaling $4.1 million. This is below the average for companies of similar size and seems quite reasonable. While the level of CEO remuneration should not be the biggest factor influencing a company’s image, a modest remuneration is a positive thing, as it shows that the board of directors cares about the interests of shareholders. Generally speaking, a reasonable level of remuneration can justify good decision making.
The earnings-per-share growth for Marriott Vacations Worldwide is impressive. An added bonus for those who are interested is that the management owns a significant amount of shares and the CEO receives a fairly good remuneration, which indicates good money management. A big jump in earnings could signal good business momentum. Big growth can lead to big winners, which is why the omens tell us that Marriott Resorts International deserves careful attention. However, before you get too excited, we spotted 2 warning signs (1 of which is a bit off!) for Marriott International resorts that you should be aware of.
The beauty of investing is that you can invest in almost any company. But if you prefer to focus on stocks that have exhibited insider behavior, here is a list of companies that have made insider buying in the last three months.
Please note that insider trading discussed in this article refers to transactions subject to registration in the relevant jurisdictions.
Marriott Vacations Worldwide Inc. is a vacation management company that develops, markets, sells and manages vacation property and related products.show more
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Marriott Vacations Worldwide Inc. is a vacation management company that develops, markets, sells and manages vacation property and related products.
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Post time: Jun-30-2023