Summary: OVERPRICED
Score: 8/20
MOS: 0%
Share Price: $123
Sticker Price: $0
Is Hilton Worldwide Holdings stock a good buy?
Hilton Worldwide Holdings, formerly known as Hilton Hotels Corporation, was founded in 1919 and based out of Tysons Corner, VA.
Hilton has over 6,200 properties with over 980,000 rooms in 118 countries.
Here is an interesting breakdown of its brands:
Luxury
- Waldorf Astoria Hotels and Resorts
- LXR Hotels & Resorts
- Conrad Hotels & Resorts
Upper Upscale
- Hilton San Diego Bayfront, one of Hilton’s flagship properties
- Hilton San Francisco Union Square, the second largest Hilton with over 2,000 rooms
- Hilton Hotels & Resorts (Flagship Brand of Hilton Worldwide)
- Canopy by Hilton[69]
- Curio Collection by Hilton
- Signia by Hilton
- Embassy Suites by Hilton
Upscale
- DoubleTree by Hilton
- Tapestry Collection by Hilton
- Tempo by Hilton
- Hilton Garden Inn
- Homewood Suites by Hilton
Upper Midscale
- Hampton by Hilton
- Motto by Hilton
- Home2 Suites by Hilton
Midscale
- Tru by Hilton
Timeshare
- Hilton Grand Vacations, independently operated company under Hilton Grand Vacations Inc.
This article from Investorspalce.com titled “3 Hotel Stocks Hoping for a Hot Summer Season” mentions three stocks that are poised for growth including Hilton World Wide Holdings (HLT), Marriott International (MAR), and Wyndham Hotels and Resorts (WH).
Let’s see how they stack up within Tykr…
MAR (Marriott International)
Score: 4/20
MOS: 0%
Share Price: $147
Sticker Price: $0
Summary: OVERPRICED
WH (Wyndham Hotels and Resorts)
Score: 4/20
MOS: 1%
Share Price: $63
Sticker Price: $64
Summary: OVERPRICED
This article from afar.com states that on January 15th, 2021, more than 50 countries have said they are welcoming US leisure travel. This includes:
- Antigua and Barbuda, Aruba, the Bahamas, Bermuda, Jamaica, St. Bart’s, St. Lucia, and Turks and Caicos in the Caribbean
- Albania, Ireland, Serbia, Turkey, and the United Kingdom across Europe
- French Polynesia and the Maldives
- Ghana, Nigeria, Tanzania, and Rwanda in Africa
- Belize, Colombia, Panama, and Peru in Central and South America
- United Arab Emirates
This same article also states that Starting January 26, all international passengers flying into the US —including returning US citizens—will need to provide proof of a negative COVID-19 test prior to boarding, according to the U.S. Centers for Disease Control and Prevention (CDC).
Although international travel is slowly starting to open up, it’s not opening fast enough to qualify these hotel stocks as growth stocks. We also now travel probably won’t go back to where it was for while, if ever. Travel restrictions will most likely remain in force for a while.
Although the HLT share price has been climbing over the last year, I can’t trust it due to the Tykr Overpriced summary.
Now let’s take a look at the financials. Remember, Tykr analyzes 5 years of historical data. Let’s take a look at the last 4 quarters.
Revenue (Found on the Income Statement)
Q1 2020 = $1.9B
Q2 2020 = $564M
Q3 2020 = $933M
Q4 2020 = $890M
Revenues have declined significantly since a year ago.
Net Income (Found on the Income Statement)
Q1 2020 = $18M
Q2 2020 = -$430
Q3 2020 = -$79M
Q4 2020 = -$224M
Net income shows a sharp decline in the last quarter.
EPS (Found on the Income Statement)
Q1 2020 = .32
Q2 2020 = -1.43
Q3 2020 = -.26
Q4 2020 = -.28
EPS is still negative and has declined from Q3 to Q4.
Net Change in Cash (Found on the Cash Flow Statement)
Q1 2020 = $1.1B
Q2 2020 = $2.9B
Q3 2020 = $2.8B
Q4 2020 = $2.6B
The Net Change in Cash is actually impressive. This will help the company survive during difficult times like this.
Total Assets (Found on the Balance Sheet)
Q1 2020 = $15.7B
Q2 2020 = $17.1B
Q3 2020 = $17.1B
Q4 2020 = $16.7B
The Total Assets are holding steady.
Total Liabilities (Found on the Balance Sheet)
Q1 2020 = $16.7B
Q2 2020 = $18.4B
Q3 2020 = $18.4B
Q4 2020 = $18.2B
The Total Liabilities are also holding steady.
Total Debt (Found on the Balance Sheet)
Q1 2020 = $9.4B
Q2 2020 = $10.4B
Q3 2020 = $10.4B
Q4 2020 = $10.4B
The Total Debt is also holding steady.
Total Equity (Found on the Balance Sheet)
Q1 2020 = -$914M
Q2 2020 = -$1.2B
Q3 2020 = -$1.3B
Q4 2020 = -$1.4B
The Total Equity in the negatives is a bad sign for investors.
With a score of 8/20 and a MOS of 0%, HLT has too much risk. The most recent quarterly report on 2/17 was negative, yet the stock continues to climb. I would be concerned if I held this stock in my portfolio. If you’re interested in travel or hotel stocks, I would place them on your watchlist and see if they turn from Overpriced to On Sale.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.