Typically, a purchaser acquires an interest (known as a “vacation ownership interest”) that is either a real estate ownership interest (known as a “timeshare estate”) or a contractual right-to-use interest (known as a “timeshare license”) in a single resort or a collection of resort properties. The obvious advantage is that you live in your own home while being on vacation in a place you otherwise couldn't afford a home.
Marriott Vacations Worldwide Corp. develops, markets, sells, and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The company also develops, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and holds right to develop, market, and sell ownership residential products under The Ritz-Carlton Residences brand. It sells points-based vacation ownership products through two points-based ownership programs: Marriott Vacation Club Destinations and Marriott Vacation Club, Asia Pacific programs; and weeks-based vacation ownership products. As of January 1, 2016, the company operated 61 properties with 12,807 vacation ownership villas and approximately 410,000 owners in the United States, and 8 other countries and territories. In addition, it is involved in financing consumer purchases of vacation ownership products; and renting vacation ownership inventory. The company sells its upscale tier vacation ownership products primarily through a network of resort-based sales centers and off-site sales locations. Marriott Vacations Worldwide Corporation is headquartered in Orlando, Florida.
(Summary) (Company) (Chart)
5 October 2016
1yr Target $82.00
Payout Ratio 26.17%
1yr Cap Gain 11.83%
1yr Tot Return 13.46%
EPS (ttm) $3.82
EPS next yr $5.24
Forward P/E 14.00
EPS next 5yr 15.70%
1yr Price Support $82.26
Market Cap $1.96 Bil
Revenues $1.81 Bil
Earnings $115.40 Mil
Profit Margin 6.35%
Quick Ratio ---
Current Ratio ---
1yr RevGR 5.47%
3yr RevGR 3.70%
5yr RevGR ---
1yr EarnGR 63.94%
3yr EarnGR ---
5yr EarnGR ---
1yr DivGR 320.00%
3yr DivGR ---
5yr DivGR ---
Marriott Vacations Worldwide is one of the world’s largest companies whose business is focused almost entirely on vacation ownership, based on their number of owners, number of resorts and revenues. They are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. They are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, and they have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand.
The company's business is grouped into three reportable segments: North America, Europe and Asia Pacific. As of January 1, 2016, the company's portfolio consisted of 61 properties in the US and eight other countries and territories, including two hotels that the company intends to convert to vacation ownership interests. Marriott Vacations generates most of their revenue from four primary sources: selling vacation ownership products; managing resorts; financing consumer purchases of vacation ownership products; and renting their vacation ownership inventory.
Marriott Vacation's strategic goal is to further strengthen their leadership position in the vacation ownership industry through initiatives to drive profitable contract sales growth, maximize cash flow and optimize their capital structure, selectively pursuing compelling new business opportunities, and focusing on owners, guests and associates. They believe that they have significant competitive advantages, including scale and global reach, the quality and strength of the Marriott and Ritz-Carlton brands, their system of high-quality resorts, their loyal and highly satisfied customer base, their long-standing track record of their experienced management team and associates.
Marriott Vacations Worldwide recently celebrated their 30 year anniversary of providing vacation memories and experiences to millions of families. Prior to the incorporation of Marriott Vacations Worldwide Corporation in Delaware in June 2011, their operations were the vacation ownership division of Marriott International. Marriott International completed the spin-off of its vacation ownership division on November 21, 2011. Since the Spin-Off, Marriott Vacations has been an independent public company, with common stock listed on the New York Stock Exchange under the symbol “VAC”. Their corporate headquarters located in Orlando, Florida.
Since 1984, when Marriott became the first major lodging company to enter the vacation ownership industry with its acquisition of American Resorts, a small vacation ownership company, they have been recognized as a leader and innovator in the vacation ownership industry. Marriott International leveraged its well-known “Marriott” brand to sell vacation ownership intervals, which were frequently located at resorts developed adjacent to Marriott International hotels. Over time, the company differentiated its offerings through its high-quality resorts that were purpose-built for vacation ownership, exchange opportunities available under its Marriott Rewards customer loyalty program that increased the flexibility of use of ownership, its dedication to excellent customer service and its commitment to ethical business practices. These qualities encouraged repeat business and word-of-mouth customer referrals.
In connection with the Spin-Off, Marriott Vacations entered into a License, Services, and Development Agreement with Marriott International and its subsidiary Marriott Worldwide Corporation and a License, Services, and Development Agreement with The Ritz-Carlton Hotel Company, L.L.C., a subsidiary of Marriott International. Under the License Agreements, the company was granted the exclusive right, for the terms of the License Agreements, to use certain Marriott and Ritz-Carlton marks and intellectual property in their vacation ownership business, the exclusive right to use the Grand Residences by Marriott marks and intellectual property in their residential real estate business and the non-exclusive right to use certain Ritz-Carlton marks and intellectual property in their residential real estate business.
Our Sources of Revenue
Marriott Vacations generates most of their revenue from 4 primary sources: selling vacation ownership products; managing our resorts; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.
Sale of Vacation Ownership Products
The company's principal source of revenue is the sale of vacation ownership interests.
Resort Management and Other Services
The company generates revenue from fees they earn for managing each of the resorts. They earn revenue for providing ancillary offerings, including food and beverage, retail, and golf and spa offerings at the resorts. They also receive annual fees, club dues, settlement fees from the sale of vacation ownership products, and certain transaction-based fees from owners and other third parties, including external exchange service providers.
The company earns interest income on loans that they provide to purchasers of the vacation ownership interests, as well as loan servicing and other fees.
The company generates rental revenue from transient rentals of inventory they hold for sale as interests in their vacation ownership programs or as residences, or inventory that they control because owners have elected alternative usage options permitted under the vacation ownership programs.
Marriott Vacations designs, builds, manages and maintains properties at upscale and luxury levels under four brands in accordance with the Marriott and Ritz-Carlton brand standards.
The Marriott Vacation Club brand is the signature offering in the upscale tier of the vacation ownership industry. Marriott Vacation Club resorts typically combine many of the comforts of home, such as spacious accommodations with one, two and three bedroom options, living and dining areas, in-unit kitchens and laundry facilities, with resort amenities such as large feature swimming pools, restaurants and bars, convenience stores, fitness facilities and spas, as well as sports and recreation facilities appropriate for each resort’s unique location.
Grand Residences by Marriott is an upscale tier vacation ownership and whole ownership residence brand. The accommodations for this brand are similar to those offered under the Marriott Vacation Club brand, but the duration of the vacation ownership interest is longer, ranging between three and thirteen weeks. The company also offers whole ownership residential products under the Grand Residences by Marriott brand.
The Ritz-Carlton Destination Club is a luxury tier vacation ownership brand. The Ritz-Carlton Destination Club provides luxurious vacation experiences commensurate with the legacy of the Ritz-Carlton brand. The Ritz-Carlton Destination Club resorts typically feature two, three and four bedroom units that generally include marble foyers, walk-in closets, custom kitchen cabinetry and luxury resort amenities such as large feature pools and access to full service restaurants and bars. On-site management and services, which usually include daily maid service, valet, in-residence dining, and access to fitness facilities as well as spa and sports facilities as appropriate for each destination, are provided by The Ritz-Carlton Hotel Company.
The Ritz-Carlton Residences is a luxury tier whole ownership residence brand. The Ritz-Carlton Residences includes whole ownership luxury residential condominiums co-located with The Ritz-Carlton Destination Club resorts. Owners can typically purchase condominiums that vary in size from one-bedroom apartments to spacious penthouses. Owners of The Ritz-Carlton Residences can avail themselves of the services and facilities that are associated with the co-located The Ritz-Carlton Destination Club resort on an a la carte basis. On-site management and services are provided by The Ritz-Carlton Hotel Company.
While I've been able to find only limited information on the fundamentals of this company, I like the concept of shared ownership of vacation resorts. It allows individuals and families the opportunity of own a premier luxury vacation home at a fraction of the cost of whole ownership and without all the costs associated with maintaining the property when not occupying the property. And Marriott Vacations can make a tidy sum of money hosting the entire enterprise.
I intend to start a small position to see how an investment in this company develops. But I want to buy these share as cheaply as I can. Looking at the weekly chart of this company, I would like to buy shares near the lower Bollinger Band which is near $60. This would also bring the PEG down to 1.00 and the P/E ratio closer to its expected 5yr estimated earnings growth rate.
That may take awhile for the stock price to drop to $60 but luckily I've got plenty of time and plenty of other stocks to watch in the meantime.