Hyatt Hotels Corporation (NYSE:H): Has Recent Earnings Growth Beaten Long-Term Trend?
After looking at Hyatt Hotels Corporation’s (NYSE:H) latest earnings announcement (31 December 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. View our latest analysis for Hyatt Hotels
Did H beat its long-term earnings growth trend and its industry?
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to assess different stocks on a similar basis, using the latest information. For Hyatt Hotels, its most recent bottom-line (trailing twelve month) is US$249.00M, which, against last year’s level, has risen by 22.06%. Since these values may be fairly nearsighted, I have created an annualized five-year figure for Hyatt Hotels’s net income, which stands at US$180.89M This suggests that, on average, Hyatt Hotels has been able to increasingly raise its profits over the last couple of years as well.
What’s enabled this growth? Well, let’s take a look at if it is solely because of industry tailwinds, or if Hyatt Hotels has experienced some company-specific growth. Over the past couple of years, Hyatt Hotels expanded its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Viewing growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 14.79% in the past twelve months, and 11.68% over the previous five years. This means that whatever uplift the industry is enjoying, Hyatt Hotels is capable of leveraging this to its advantage.
What does this mean?
Hyatt Hotels’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Hyatt Hotels has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Hyatt Hotels to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for H’s future growth? Take a look at our free research report of analyst consensus for H’s outlook.
2. Financial Health: Is H’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
