Interested In Marriott Vacations Worldwide Corporation (NYSE:VAC)? Here’s What Its Recent Performance Looks Like
Assessing Marriott Vacations Worldwide Corporation’s (NYSE:VAC) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess VAC’s latest performance announced on 30 June 2018 and evaluate these figures to its historical trend and industry movements.
Check out our latest analysis for Marriott Vacations Worldwide
Did VAC’s recent earnings growth beat the long-term trend and the industry?
VAC’s trailing twelve-month earnings (from 30 June 2018) of US$197.4m has jumped 29.3% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 41.2%, indicating the rate at which VAC is growing has slowed down. To understand what’s happening, let’s look at what’s transpiring with margins and if the entire industry is feeling the heat.
Over the past few years, revenue growth has been lagging behind which implies that Marriott Vacations Worldwide’s bottom line has been driven by unsustainable cost-cutting.
Looking at growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 29.4% over the prior twelve months, and 16.2% over the past five years. This growth is a median of profitable companies of 25 Hospitality companies in US including Golden Entertainment, El Pollo Loco Holdings and Shake Shack. This suggests that whatever uplift the industry is benefiting from, Marriott Vacations Worldwide has not been able to gain as much as its average peer.
In terms of returns from investment, Marriott Vacations Worldwide has fallen short of achieving a 20% return on equity (ROE), recording 18.5% instead. Furthermore, its return on assets (ROA) of 7.0% is below the US Hospitality industry of 7.2%, indicating Marriott Vacations Worldwide’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Marriott Vacations Worldwide’s debt level, has declined over the past 3 years from 9.6% to 8.0%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 59.2% to 125% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Marriott Vacations Worldwide gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Marriott Vacations Worldwide to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for VAC’s future growth? Take a look at our free research report of analyst consensus for VAC’s outlook.
Financial Health: Are VAC’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.
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 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
