Shares of Marriott Vacations Worldwide Corp. (VAC) hit a new 52-week high of $72.55 on Nov 12, on raised guidance for 2014.
The company’s share price has been gaining momentum since it increased the 2014 outlook and reported the third-quarter 2014 results. The company’s closing price of $72.40 reflects a year-to-date return of over 38.8%.
On Oct 16, Marriott Vacations reported third-quarter results wherein the company raised its earnings guidance for 2014, despite missing the Zacks Consensus estimate for both earnings and revenues. The company raised the full-year guidance to a range of $2.67–$2.84 from $2.64–$2.82.
The 2014 Zacks Consensus Estimate rose 22.2% to $2.82 from $2.73 over the past 30 days. Earnings are expected to grow in double digits in 2015 compared to 2014 as analysts predict another 12.8% rise in earnings.
The company’s development margin rose to 21.5% from 21.1% a year ago with North American development margin expanding to 24.4% from 22.7%. North American volumes per guest also rose 6.9% year over year to $3,477. A time-share business gets the maximum part of the revenues from contract sales. With contract sales up 2.4% year over year, driven by higher vacation ownership contract sales in the company's North America, Europe and Asia segments, we believe that this Zacks Rank #2 (Buy) stock is poised to move even higher.
On Oct 16, the company also announced the first dividend payout of 25 cents since its Initial Public Offering in 2011. Also, the company’s current $186 million share repurchase program will be completed soon and the board of directors recently authorized an additional repurchase of up to 3.4 million shares.
Other stocks in the same sector that have scaled a 52-week high on Nov 12 are Darden Restaurants, Inc. (DRI), Lowe's Companies Inc. (LOW) and DineEquity, Inc. (DIN).
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