Marriott International, Inc.(MAR), a leading worldwide hospitality company, has recently announced its decision to hike its quarterly dividend by 30% to 13 cents per share from 10 cents per share. The quarterly dividend equates to an annualized dividend payment of 52 cents per share. The increased dividend will be paid on June 22, 2012, to stockholders of record as of May 18.
Marriott has a consistent track record of paying dividends and the latest hike brings the forward annual dividend yield, as of May 11, 2012, to 1.32%. Previously, in May 2011, Marriott had increased its quarterly dividend by 14% to 10 cents per share to boost shareholder value.
In a concerted effort to enhance shareholders’ value, the Bethesda, Maryland-based company also has a share buy back program in place. In the first quarter of 2012, the company repurchased 4.2 million shares for a total of $150 million. On February 10, 2012, the board of directors approved the buyback of 35 million additional shares and as of April 17, 2012, the company had 33.8 million shares remaining under share repurchase program. Marriot is working toward its goal of returning $1 billion to shareholders in 2012, through share repurchase and dividend.
Marriott possesses a strong balance sheet and is well placed financially. At the end of the first quarter 2012, the company’s cash balances increased sequentially to $290 million from $102 million. We believe that the company has enough cash to provide optimum shareholder value.
We appreciate Marriott’s efforts to consistently enhance long-term shareholder value even amid an economic downturn. We believe that an increase in dividend payment affirms the company’s optimistic outlook and depicts that it is heading toward strong future growth.
In addition, from 2013 onwards, the company will adopt calendar year as compared to fiscal year to release its operational results.
Marriott, which competes with the likes of Intercontinental Hotels Group Plc. (IHG) and Starwood Hotels & Resorts Worldwide Inc. (HOT), currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock.
STARWOOD HOTELS (HOT): Free Stock Analysis Report
INTERCONTL HTLS (IHG): Free Stock Analysis Report
MARRIOTT INTL-A (MAR): Free Stock Analysis Report
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