WYN shares are currently trading around $39, and the mean 12-month price target from analysts researching the stock is $43 (20% real upside potential). This stock is trading above its 50-day exponential moving average of $34 and its 200-day exponential moving average of $31. The stock fell through these EMAs when the market took a tumble in August, and has been on an upward trend since.
Earnings per share for the last 12 months are $2.53, and these are expected to reach to $2.76 in its next fiscal year (ending December 2012). These numbers place the shares on a trailing P/E ratio of 15, and a forward multiple of 12. The average trailing P/E ratio in the sector is 20, and Marriott International (NASDAQ:MAR) trades on a multiple of 54.
For investors looking at dividend-paying stocks, WYN’s payment of a dividend of $0.6 last year gives the stock a yield of 1.6%, and is covered four times by its earnings. MAR offers shareholders a yield of 1.30%.
Current operating margin at WYN is 20%, with a return on assets of 5.7% and a return on equity of 16%. The current revenue from its income statement is $4.2 billion, and last quarter’s revenue showed year-on-year growth of 13.80%. WYNN has cash of $175 million, and a total of $3.8 billion in debt. The company’s debt/equity ratio is a concerning 150. Comparing all these numbers to Marriott’s, the company looks as if it is in good shape. MAR’s return on assets is 3.6%, and its return on equity is 25%. Its operating margin is a lowly 4.%, and its debt to equity ratio is huge, around 700.
Looking at the 12-month chart, WYN shares have performed in line with the broader S&P 500 Index. It is no surprise that they have outperformed MAR shares, and I expect them to continue to do so.
WYN’s earnings are expected to show another strong rise when released. Analysts are predicting a flat EPS compared to a year previous, at 44 cents. The company has beaten earnings estimates for the last four quarters, and is set to continue to do so.
One reason for its great run of results is its customer loyalty program. This program is one of the most respected in the world, and largest, and the company continues to expand it to promote its own business. This undoubtedly brings customers back time and again. Its latest add-on is the expansion of its redemption catalog for Canadian customers.
The company is also using the current economic situation to expand its operations further. It has opened its first hotel in Orlando, and expanded its timeshare vacation ownerships with a new resort in Hawaii.
In conclusion, the combination of company fundamentals, share price performance, and the steady roll-out of good news — expanding the business and seeking to reward loyal customers and build further customer loyalty — leads me to give the shares a positive rating.