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Marriott International Inc (MAR), Starwood Hotels & Resorts Worldwide, Inc (HOT): Which Hotel Company Is the Best Stay for Your Portfolio?

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One segment of the market that continues to be strong is the international hotel business. Particularly in Asia, there’s a building boom of new hotels as countries prosper and attract more international travelers. Hotel companies that have an international presence are able to leverage their brands and develop a loyal clientele. By having all price points, these hotel companies are also able to appeal to a wider range of customers. For investors, it’s important to identify not only which hotel to stay in while traveling, but also the best hotel company to own.

In business since 1927

Marriott International Inc (NYSE:MAR)
Marriott International Inc (NYSE:MAR) was founded by J.W. Marriott in 1927. The company now has more than 3,800 properties spread across more than 74 countries and territories. Marriott International Inc (NYSE:MAR) brands include Marriott International Inc (NYSE:MAR), JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn, Springfield Suites, Gaylord, Bulgari and EDITION.

In the first quarter of this year, the company reported earnings of $0.43 per share, which was better than the company’s forecast of $0.37 to $0.42. The operating margin increased from 34% to 38% in the quarter. Marriott International Inc (NYSE:MAR) repurchased over 5 million shares. The Ritz-Carlton luxury brand was the strongest performer with North American REVPAR (revenue per available room) increasing 9% and 11% outside North America.

Going forward, the Ritz-Carlton chain is going to grow by 35% with 31 new properties in the pipeline. The luxury market globally is particularly strong and that will benefit Marriott International Inc (NYSE:MAR) as Ritz-Carlton continues to expand. In addition to expansion of the Ritz-Carlton brand, Marriott International Inc (NYSE:MAR) has a total of 135,000 hotel rooms in development with 62,000 hotel rooms already under construction.

For the full year, Marriott expects EBITDA (earnings before interest, taxes, depreciation, and amortization) of $1.2 billion, which is up from last year’s $1.14 billion. Earnings are forecast to be between $1.93 to $2.08 per share, an increase of 12% to 21% from 2012. Marriott plans on returning $800 million to $1 billion to shareholders in the form of dividends and share repurchases.

An aggressive acquirer

Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) was formed from the acquisition binge of former CEO Barry Sternlicht. His biggest acquisition was in 1998 when Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) merged with ITT Sheraton. Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT)’s brands include St. Regis, The Luxury Collection, Four Points, Aloft, W, Westin, Le Meridien, and Element. Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) has approximately 1,146 properties in 100 countries.

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