Another strategy of InterContinental Hotels Group PLC (ADR) (NYSE:IHG), which will directly lead to higher shareholder’s returns, is its asset disposal policy. The program includes the disposal of the IHG London Park Lane and the IHG New York Barclay. The sale of its property in New York is taking much longer time than what was earlier expected. However, the improvement in the commercial real estate prices will help the company to fetch a more attractive price in 2013. These sale proceeds will be utilized by the company to return more cash to its shareholders via dividend or buybacks. With this, IHG remains on track with its $1 billion return of capital to its shareholders, announced in August, 2012.
Wyndham Worldwide Corporation (NYSE:WYN) – Making its presence with a difference!
Wyndham reported its fourth quarter results for 2012 with adjusted EPS of $0.63, beating the consensus estimate of $0.60. This was also up by around 34% on a year-on-year basis. The company’s fourth-quarter revenue increased by about 9% to $1.1 billion, mainly driven by its lodging and vacation ownership segments. The company even gave its shareholders, a reason to celebrate by increasing the dividend by 26% bringing the annual dividend to $1.16 per share.
The key differentiator for Wyndham Worldwide Corporation (NYSE:WYN) is its higher focus on the asset-light model. With this strategy, the company continues to adopt an asset-light structure aiming at capital optimization. This has always helped the company to generate a good amount of free cash flow, which has supported the shareholder’s return in a better way. The company even increased its guidance for free cash flow to $750 million from its previous guidance of $650-$700 million. This is an annual figure for 2013 and 2014, reflecting a yield of 9%-10%. At this level, Wyndham has the highest cash flow yield among the lodging stocks.
Recap
All the three stocks discussed above can be seen as investor-friendly stocks with their respective policies. Marriott International Inc (NYSE:MAR)’s expansion in Asia, especially Macau, will boost its RevPAR and IMF growth. Along with that, its strong foothold in North America and a low-leverage position will help the company to provide better return to its shareholders.
Similarly, InterContinental Hotels Group PLC (ADR) (NYSE:IHG)’s focus on its new brands and its asset disposal policy; will fetch more returns for its shareholders. And, Wyndham Worldwide Corporation (NYSE:WYN)’s strength lies in its asset-light model, which has made it a high cash flow generating company over time.
I recommend a Buy for all three companies.
The article These Investor Friendly Companies Will Make Your Portfolio Shine! originally appeared on Fool.com.
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