3 Top-Ranked Hotel Stocks To Buy This Summer
Zacks Investment Research | May 22, 2017 09:54PM ET
Late last week, data provided by STR showed mixed results from the U.S. hotel industry for the three key performance metrics in Apr 2017. According to STR, occupancy rates in the industry declined 0.7% year-over-year in Apr 2017 to 67.5% while average daily rate (ADR) went up 2.4% to $126.26 and revenue per available room (RevPAR) increased 1.7% to $85.19. Group occupancy declined 12.5% with meeting planners avoiding the time around the Easter holiday. However, STR noted that despite the decline and supply growth of about 2%, absolute occupancy level was the second-highest for any April on record. Moreover, the industry continued to witness consecutive months (86 months) of year-over-year RevPAR growth.
The Zacks-categorized VGM Score of “B”. Our research shows that stocks with a VGM Score of “A” or “B” when combined with a Zacks Rank #1 or #2 offer the best upside potential. Estimated earnings growth for the current year is 10.4%. As per a recent report from the ARDA International Foundation (AIF), the timeshare industry remains healthy. According to the report, about 9.2 million households in America own a timeshare with the average length of ownership being nine years.
China Lodging Group, Limited (NASDAQ:HTHT) : China Lodging Group is a leading and fast-growing multi-brand hotel group in China with leased and owned, manachised (franchised-and-managed) and franchised models. As of Mar 31, 2017, the company had a total of 3,336 hotels or 335,900 hotel rooms in operation. The company’s main focus is on the economy and midscale hotel segments.
China Lodging Group has a pretty good earnings track record with the company surpassing expectations in each of the last four quarters with an average surprise of 36.43%. 2017 earnings estimates are up 5.4% over the last 30 days. The company witnessed strong RevPAR growth in the first quarter driven by market conditions, consumption upgrade as well as the economy's stronger performance and the company’s direct sales effort. Estimated earnings growth for the current year is 30.5%. China Lodging Group, a Zacks Rank #1 (Strong Buy) stock, has outperformed the Zacks-categorized Hotel and Motels industry YTD with shares soaring 46%.
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