3 best hotel stocks to buy now
The top three hotel stocks to buy right now include an owner-operator of casino spas, an online travel agency website, and a real estate investment trust that owns, acquires and leases properties for the purposes of catering, retail and hotel.
Although the hospitality and travel industry has been hit hard over the past year and a half by the COVID-19 pandemic, it has started to see major signs of recovery around the world as governments federal and local lift lockdown regulations, infection rates drop, and vaccines. deployment continues nationally and globally.
With the worst of the pandemic likely behind us, now may be the time to invest in hotel stocks as they begin to rebound.
3 Best Hotel Stocks To Buy Now, According To DividendInvestor.com
These stocks were found and analyzed through our own Dividend filtering on the Dividend investor website. the Dividend filtering is a simple web-based tool that allows investors to sift through thousands of potential stocks by adding their own custom criteria to find stocks that meet the unique needs of their portfolio.
Based on research, here are the top three hotel stocks to buy right now.
3 Best Hotel Stocks to Buy Now: # 3
Four Corners Property Trust, Inc. (NYSE: FCPT)
Four Corners Property Trust, Inc. (NYSE: FCPT) is a real estate investment trust (REIT) that specializes in the acquisition and rental of real estate for restaurant, retail and hotel purposes. The company is headquartered in Mill Valley, California, and owns more than 800 properties in 46 states and 85 brands, with Darden Restaurants and Brinker International among its largest customers.
Four Corners Property Trust is one of the few companies related to the hotel or restaurant industries that has not experienced a drop in income or profits thanks to COVID-19. Instead, the company’s revenue and net profit increased from 2019 to 2020 by 11.8% and 6.3%, respectively. The trend has since continued until 2021. The FCPT experienced continuous growth in the first quarter of 2021, with an increase of 10.0% in revenue and 6.7% in net profit compared to the first. quarter 2020.
The FCPT suffered a 125% drop in the share price in March 2020 due to COVID-19, but has since recouped most of its losses and has seen a 24.8% share price growth in the past 12 months. Its one-year returns are shown below with a 50-day moving average line.
Graphic provided by Stock Rover.
What sets FCPT apart are its high returns compared to the rest of the industry. With a return on invested capital, return on equity and return on assets of 6.6%, 9.3% and 4.6%, respectively, Four Corners ranks well above comparable industry averages. of -6.4%, -17.2% and -7.7%. The company’s resilience and ability to remain profitable and generate strong returns during COVID-19, with a one-year volatility rate of 0.35 compared to the industry average of 0.52, in make an attractive investment during a period of high economic and market volatility. .
As a REIT, Four Corners should attract those looking to invest in high dividend-paying stocks, as REITs are required by law to pay more than 90% of their taxable income to their shareholders. FCPT currently has a dividend yield of 4.6%, compared to just 0.3% for the industry average and 1.2% for the S&P 500 average.
A discounted cash flow (DCF) analysis using Stock Rover The stock is valued at $ 31.50, 13.3% higher than its last closing price of $ 27.81, with analysts forecasting 11.1% sales growth for 2021, which has earned the FCPT a “buy” recommendation.
3 Best Hotel Stocks to Buy Now: # 2
Monarch Casino & Resort, Inc. (NASDAQ: MCRI)
Monarch Casino & Resort, Inc. (NASDAQ: MCRI) owns and operates casino spas in the western United States. Monarch’s business comes entirely from two locations: its flagship product Atlantis Casino Resort Spa in Reno, Nevada, purchased when the company was founded in 1972, and the Monarch Casino Resort Spa in Black Hawk, Colorado, acquired in 2012. two establishments have since undergone multiple expansions. , renovations and rebrandings upon arrival under Monarch ownership. The most recent, an extension of the company’s Black Hawk site, was completed in November 2020.
The company showed strong growth in the years leading up to COVID-19. It reported a compound annual growth rate (CAGR) of 8.01% for revenue and 22.11% for the share price from 2011 to 2019. Although COVID-19 has had a negative impact on Monarch’s business, with annual revenue falling 26% from 2019 to 2020, the company has rebounded, with sales expected to not only return to pre-COVID-19 levels, but surpass them. Recent reports to shareholders have shown that first quarter 2021 revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) were 46.9% and 181.6%, respectively, higher than the first quarter 2020 figures. The company’s annual return of 17.0% also exceeded the industry average of 9.1% and the S&P 500 by 12.1%. IBISWorld predicts an average annual industry growth of 14.8% in revenue from 2020 to 2025.
MCRI’s stock price for the past year is plotted below, with a 50-day moving average to show the steady uptrend.
Graphic provided by Stock Rover.
Due to the rebound and high growth potential of Monarch, the company’s stock has skyrocketed, with a 352% increase in the share price, from $ 15.69 in March 2020 to $ 70.59 today.
Although Monarch has seen a significant increase in debt in recent years, with its net debt ratio rising from -0.1x in 2017 to 3.5x in 2020, this is not a cause for concern. The company’s leverage remains well below the industry average net debt ratio of 6.3x for hotel casinos over the past three years. Monarch also reduced its net debt ratio from 3.5x to 2.3x by the end of the first quarter of 2021, while only decreasing balance sheet cash by about $ 4 million.
A discounted cash flow (DCF) analysis using Stock Rover The stock is valued at $ 79.33, 10.7% higher than its last closing price of $ 71.64, with analysts forecasting 76.1% sales growth for 2021, which has earned MCRI a “strong buy” recommendation.
3 Best Hotel Stocks to Buy Now: # 1
Trip.com Group Ltd (NASDAQ: TCOM)
Trip.com Group Ltd (NASDAQ: TCOM), originally known as Ctrip.com International, Ltd, is an online travel services company based in Shanghai, China, specializing in hotel, train, airline and travel deals. organized trips around the world. Since its inception in 1999, Trip.com has grown into one of the largest online travel agencies in the world and the largest in China, with more than 400 million members and 45,000 employees.
Although the company saw its revenue decline 49% from 2019 due to COVID-19, it has since rebounded. Domestic sales in China, the company’s main source of revenue, have recovered significantly.
Chinese hotel and airline bookings on the website returned to pre-COVID-19 levels for the same period in 2019. The company’s accommodation booking and transportation ticketing segments accounted for 77 % of Trip.com group revenue that year. Domestic business travel management also increased by 101% year-over-year and 6% compared to the same period in 2019.
The company has provided a higher return over the past year than the industry average and the S&P 500, with a year-to-date return of 16.6% vs. 11.9% and 12.1 %, respectively. With an average five-year earnings per share (EPS) growth of 9.9% and a beta of 0.98, unlike the industry average of 9.9% and 1.43, TCOM is also a more investment. cost effective and more secure compared to similar companies.
As shown in the chart below, which represents the share price for last year, alongside a 50-day moving average, TCOM’s share price has risen 66% over the past 12 years. month, going from $ 23.80 in May 2020 to $ 39.57.
Graphic provided by Stock Rover.
Although Trip.com is seeing a slower recovery internationally due to tighter lockdown restrictions and a higher number of COVID-19 cases abroad, the lifting of regulations in the West and the Vaccine deployment will provide a boon to travel demand in the United States and Europe. IBISWorld expects a 10.9% annual increase in travel agency revenues over the next five years, from 2021 to 2025, as the economy and the travel industry both rebound from the pandemic.
A discounted cash flow (DCF) analysis using Stock Rover The stock is valued at $ 45.50, 15.6% higher than its last closing price of $ 39.34, with analysts forecasting 33.8% sales growth for 2021, which has earned TCOM a “buy” recommendation.
The three best hotel stocks to buy offer investors the opportunity to profit from undervalued stocks in an industry recovering from last year’s COVID-19 closures.
Capison Pang is an editorial intern who writes for www.stockinvestor.com.