Stock of the Day

March 18, 2020

Hilton Worldwide (HLT)

$259.31
-$8.51 (-3.2%)
Market Cap: $64.43B

About Hilton Worldwide

Hilton Worldwide Holdings Inc., a hospitality company, engages in managing, franchising, owning, and leasing hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. The company engages in the hotel management and licensing of its brands. It operates luxury hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, and Conrad Hotels & Resorts brand; lifestyle hotels under the Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton brand; full service hotels under the Signia by Hilton, Hilton Hotels & Resorts, and DoubleTree by Hilton brand; service hotels under the Hilton Garden Inn, Hampton by Hilton, and Tru by Hilton brand; all-suite hotels under the Embassy Suites by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton brand; and economy hotel under the Spark by Hilton brand, as well as Hilton Grand Vacations. The company operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. The company was founded in 1919 and is headquartered in McLean, Virginia.

Hilton Worldwide Bull Case

Here are some ways that investors could benefit from investing in Hilton Worldwide Holdings Inc.:

  • Hilton Worldwide Holdings Inc. has recently announced a quarterly dividend of $0.15 per share, translating to an annualized dividend of $0.60. This indicates a commitment to returning value to shareholders, which can be attractive for income-focused investors.
  • The company has a low dividend payout ratio of 9.76%, suggesting that it retains a significant portion of its earnings for reinvestment, which could support future growth and stability.
  • Recent analyst upgrades have seen price targets for Hilton Worldwide Holdings Inc. increase, with Barclays raising their target to $287.00, indicating positive market sentiment and potential for stock appreciation.
  • Hilton Worldwide Holdings Inc. has approved a substantial stock repurchase plan of $3.50 billion, which typically signals that the board believes the stock is undervalued and can enhance shareholder value by reducing the number of shares outstanding.
  • Institutional ownership stands at 95.90%, reflecting strong confidence from large investors, which can be a positive indicator of the company's stability and growth potential.

Hilton Worldwide Bear Case

Investors should be bearish about investing in Hilton Worldwide Holdings Inc. for these reasons:

  • Despite recent upgrades, the average rating for Hilton Worldwide Holdings Inc. remains a "Hold," suggesting that many analysts are cautious about the stock's immediate upside potential.
  • The current stock price is subject to market volatility, and while recent upgrades are positive, any downturn in the hospitality sector could negatively impact Hilton Worldwide Holdings Inc.'s performance.
  • With a relatively low dividend yield of 0.22%, income-focused investors may find better opportunities elsewhere, especially in a rising interest rate environment.
  • Recent downgrades from some analysts, such as Melius Research lowering their rating from "buy" to "hold," indicate mixed sentiments about the stock's future performance.
  • The hospitality industry is sensitive to economic fluctuations, and any downturn could adversely affect Hilton Worldwide Holdings Inc.'s revenue and profitability, making it a riskier investment in uncertain economic times.

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