In order to return wealth to its shareholders, the board of directors of leading hotelier Marriott International, Inc. (MAR) has authorized the repurchase of an additional 25 million shares of the company’s Class A common stock. This is in addition to the company’s repurchase authorization of approximately 34.4 million shares. The increase reflects the company’s confidence in its fundamentals and its strong liquidity position.
Last year in Feb, the company increased the authorization by 25 million shares of the company’s Class A common stock, in addition to the approximately 34 million shares already authorized for repurchase.
Including the repurchase of 4.4 million shares worth $200.0 million in the fourth quarter of 2013, the company repurchased 20 million shares for $829 million in 2013. To date in 2014, the company has bought back 4.9 million shares for approximately $238.0 million.
The share buyback program will help the company reduce outstanding share count, thereby increasing earnings per share and return on equity. Meanwhile, this strategy to return wealth to shareholders would keep the stock attractive as it demonstrates the company’s growth potential and stable liquidity position.
Besides share repurchases, the company also returns shareholders wealth through dividends. The company has also declared a cash dividend of 17 cents to be payable on Mar 28, 2014. Meanwhile, the company has been continuously increasing its dividend with the last increase of 30.0% made in May 2013. Including cash dividends of $196 million, the company returned more than $1.0 billion in cash to its shareholders in 2013.
This Zacks Rank #3 (Hold) company is expected to report its fourth quarter 2013 results on Feb 19, 2014 and has an Earnings ESP of 0.00%. Results of Marriott International are expected to be hurt by the government shutdown in the U.S. that occurred in early Oct 2013. However, the company’s growing North American business, significant international exposure and aggressive buyback strategy would likely neutralize the effect as it did in the third quarter.
Another leading hotelier, Starwood Hotels & Resorts Worldwide Inc. (HOT) recently posted mixed fourth-quarter 2013 results with earnings beating the Zacks Consensus Estimate but revenues missing the mark. On the other hand, Hyatt Hotels Corporation (H) posted strong results with earnings and revenue both beating the Zacks Consensus.
One other hospitality company Wyndham Worldwide Corporation (WYN) recently posted mixed fourth quarter 2013 results with earnings of 73 cents missing the Zacks Consensus Estimate but revenues beating the same.
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