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3 Best Hotel Stocks to Buy in 2021

Hotel stocks have taken a hit but the hotel industry moving forward. These are some of the better buying opportunities as travel picks up.
The post 3 Best Hotel Stocks to Buy in 2021 appeared first on Investment U.

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Just like most of us, 2020 was a year that hotel stocks took a hit. But the hotel industry is excited to move forward. While the COVID-19 pandemic was difficult for most industries, the American Hotel & Lodging Association (AHLA) described it as “devastating” for the hotel industry. It also stated that the impact from the pandemic was nine times worse than the impact from 9/11.

Even though the worst of the pandemic seems to be over, the AHLA still doesn’t expect travel to return to 2019 levels until at least 2024. In fact, due to the increased popularity of remote work, certain aspects of business travel may never return to normal levels.

That being said, difficult times can create excellent buying opportunities. If you’re looking to boost your portfolio with a few of the best hotel stocks, I’ve selected a few that you should consider buying.

Here are some of the best hotel stocks to buy…

NOTE: I’m not a financial advisor and am just offering information and commentary. Please do your own due diligence before making any decisions.  

The Different Types of Hotel Companies

Before investing, it’s worth noting that there are two main structures that hotel companies operate under.

C-corporation hotels are companies that engage in hotel management, branding and marketing. These types of companies usually operate the hotel franchise but don’t actually own much of the real estate.

Hotel Real Estate Investment Trusts (REITs) generally do the opposite. REITs focus on buying, owning and operating the real estate where other companies operates. Sometimes they manage the hotels that they own but it usually depends on the company. REITs are also usually required to pay out 90% of their income to shareholders.

Now, let’s take a look at some good options for hotel stocks to buy…

Best Hotel Stocks to Buy

  • Marriott (Nasdaq: MAR)
  • Playa Hotel & Resorts (Nasdaq: PLYA)
  • MGM Resorts (NYSE: MGM)

Marriott

Marriott is the world’s largest hotel operator with 7,000 hotels in 130 countries. It might seem like an obvious choice in an article titled “Best Hotel Stocks to Buy.” However, despite being a major hotel operator, it proved that it’s able to change with the speed of a small, nimble startup. It showed this in November 2020 when it shocked investors by posting a $100 million profit while other operators were bleeding money.

When it reported this news, it disclosed that earnings had fallen by 57% from the prior year. However, by cost-cutting measures at its locations, it was able to cut expenses by 57% during the same timeframe. This allowed it to squeak out a 0.2% profit to the tune of $100 million.

Additionally, one of the biggest threats to traditional hotel stocks is the rise of companies like Airbnb. These new companies can offer guests a unique experience for usually a cheaper price. Marriott is already getting into this game with their own Airbnb-style service called Marriott Homes & Villas. This service allows guests to choose from over 2,000 properties in the U.S., Canada, Europe, the Caribbean and Latin America. Since Marriott has the power of a rewards program over Airbnb, this could actually give it an edge long-term.

Marriott’s stock is up close to 40% over the past year. It also posted revenue of $811 million for the second quarter of 2021. During the same period, it posted a net income of $422 million, an increase of 280% year over year.

Marriott’s portfolio of brands offers a range of luxury, premium and budget hotels. The brands include: The Ritz Carlton, Sheraton, Gaylord Hotels, Aloft, Four Points and many more.

Playa Hotel & Resorts

NOTE: I own a very small position in Playa.

According to the AHLA, there’s a good chance that the United States could be haunted by Covid variants until 2024. If this is true, then all hotel operators in the U.S. are likely to be impacted the same by any future lockdowns. So, for the next of the best hotel stocks to buy, we’re traveling south of the border.

Playa Hotels & Resorts is a REIT that owns a string of all-inclusive luxury oceanfront resorts in Mexico and the Caribbean. In total, it owns 20 properties in Mexico, Jamaica and the Dominican Republic. Its portfolio includes several Hilton and Hyatt properties.

It’s no secret that people are itching to travel and make up for lost time. This is starting to materialize for Playa. In its most recent earnings report, CEO Bruce Wardinski mentioned that its revenue on the books for Q3 and Q4 of 2021 already exceeds that of 2019.

Bruce also stated that the company has maintained “price discipline in a rising demand environment.” By this, he understands that they need to capitalize on the rush of tourism by charging top dollar for rooms.

Playa’s stock price is currently fairly comparable to where it was pre-pandemic.

MGM Resorts

MGM Resorts is one of the world’s biggest hospitality and entertainment companies. It owns resorts in Las Vegas, Massachusetts, Detroit, Mississippi, Maryland and New Jersey. A few of their flagship properties include the Bellagio, Mandalay Bay, MGM Grand and Park MGM.

It’s another company that showed it was able to move quickly to reduce expenses during the COVID shutdown. In 2020, it was able to reduce expenses by $450 million and is planning to deliver on these savings once demand returns to 2019 levels. When travel returns to normal, this might add an extra $450 million to their bottom line.

Already, this hotel stock has surged 85% in the past year. It’s currently around where it was before the pandemic. Its revenues have also been growing consistently since June 2020 as Covid restrictions continue to be lifted. Prior to the pandemic in 2019, it also posted its highest net income in several years of $2.05 billion.

Another interesting stock to look at is MGM Growth Properties (NYSE: MGP), which was spun off of MGM Resorts (although MGM Resorts still owns a majority stake). MGM Growth is the company that owns most of the MGM properties including seven resorts on the strip. It owns MGM Grand Las Vegas, Mandalay Bay, The Mirage, Park MGM, Luxor, Excalibur and New York-New York.

Since Las Vegas is one of the least Covid-conscious places in the United States, these two companies could do well regardless of what happens with the delta variants.

Best Hotel Stocks and Beyond

These hotel stocks can give you great exposure to the hotel industry. Although, this is just one of many industries that might be worth buying into. Here are some more industries and stocks that might see big returns…

If you’re looking for more investment research, consider signing up for Trade of the Day. It’s a free e-letter that’s packed with investing tips and tricks. Whether you’re a beginner or already advanced trader, there’s something for everyone.

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Analyst reviews Apple stock price target amid challenges

Here’s what could happen to Apple shares next.

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March 12, 2024

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They said it was bound to happen.

It was Jan. 11, 2024 when software giant Microsoft  (MSFT)  briefly passed Apple  (AAPL)  as the most valuable company in the world.

Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion. 

It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion. 

"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.

The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.

Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue. 

Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.

Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.

“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.

A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.

Future Publishing/Getty Images

Big plans for China

Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.

Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.

Related: Tech News Now: OpenAI says Musk contract 'never existed', Xiaomi's EV, and more

The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.

Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.

Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.

"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads. 

"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.

Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify  (SPOT)  and other music streaming rivals via restrictions on the App Store.

The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.

Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com. 

The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.

BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market. 

Analyst says Apple selloff 'overdone'

Concurrently, prices for previous models are typically reduced by about $100 with each new release. 

This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.

More Tech Stocks:

Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.

This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China. 

BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.

The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.

On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”

The firm said that investors' growing preference for AI-focused stocks like Nvidia  (NVDA)  has led to a reallocation of funds away from Apple. 

In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.

And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.

“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.

Related: Veteran fund manager picks favorite stocks for 2024

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Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…

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There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

Credit: IVI

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

 

The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.

 

There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.

 

“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”

 

In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.

 

There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.

 

Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.

 

Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”

 

As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.

 

###

 

About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.

IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.

IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.

 

CONTACT

Aerie Em, Global Communications & Advocacy Manager
+82 2 881 1386 | aerie.em@ivi.int

Journal

The Lancet Global Health

Method of Research

Observational study

Subject of Research

People

Article Title

Incidence of typhoid fever in Burkina Faso, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, and Nigeria (the Severe Typhoid in Africa programme): a population-based study

Article Publication Date

12-Mar-2024

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

Earlier today, CNBC’s…

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever... And Debt Explodes

Earlier today, CNBC's Brian Sullivan took a horse dose of Red Pills when, about six months after our readers, he learned that the US is issuing $1 trillion in debt every 100 days, which prompted him to rage tweet, (or rageX, not sure what the proper term is here) the following:

We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.   

Maybe it will never matter.   Maybe MMT is real.   Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.

I have no idea.  Only time will tell.   But it’s going to be fascinating to watch it play out.

He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."

According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.

The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...

... and spending which is about 50% higher compared to where it was in 2020.

The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.

And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.

But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).

And it gets even worse, because we are now in the ponzi finance stage of the Minsky cycle, with total interest on the debt annualizing well above $1 trillion, and rising every day

... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.

We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...

.. which lays out the proposed Biden budget as follows:

The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.

Without them the deficit will grow $19 trillion.

That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.

No family budget or business could exist with this kind of math.

Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.

Tyler Durden Tue, 03/12/2024 - 18:40

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