Critical Review: Wyndham Destinations (WYND) vs. Its Competitors

Wyndham Destinations (NYSE: WYND) is one of 36 public companies in the “Hotels & motels” industry, but how does it contrast to its peers? We will compare Wyndham Destinations to similar businesses based on the strength of its dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

This table compares Wyndham Destinations and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wyndham Destinations 11.67% -90.37% 6.89%
Wyndham Destinations Competitors 7.61% 15.27% 4.07%

Insider and Institutional Ownership

88.4% of Wyndham Destinations shares are held by institutional investors. Comparatively, 74.1% of shares of all “Hotels & motels” companies are held by institutional investors. 1.6% of Wyndham Destinations shares are held by insiders. Comparatively, 16.4% of shares of all “Hotels & motels” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Wyndham Destinations pays an annual dividend of $1.80 per share and has a dividend yield of 3.9%. Wyndham Destinations pays out 38.4% of its earnings in the form of a dividend. As a group, “Hotels & motels” companies pay a dividend yield of 2.2% and pay out 43.9% of their earnings in the form of a dividend. Wyndham Destinations is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Wyndham Destinations and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Wyndham Destinations $3.93 billion $672.00 million 9.92
Wyndham Destinations Competitors $3.41 billion $331.27 million 16.41

Wyndham Destinations has higher revenue and earnings than its peers. Wyndham Destinations is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations for Wyndham Destinations and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wyndham Destinations 0 4 5 0 2.56
Wyndham Destinations Competitors 535 2050 2707 102 2.44

Wyndham Destinations presently has a consensus target price of $58.08, indicating a potential upside of 24.85%. As a group, “Hotels & motels” companies have a potential upside of 13.41%. Given Wyndham Destinations’ stronger consensus rating and higher probable upside, analysts plainly believe Wyndham Destinations is more favorable than its peers.

Risk and Volatility

Wyndham Destinations has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, Wyndham Destinations’ peers have a beta of 1.30, suggesting that their average stock price is 30% more volatile than the S&P 500.

Summary

Wyndham Destinations beats its peers on 11 of the 15 factors compared.

About Wyndham Destinations

Wyndham Destinations, Inc. operates as a vacation ownership and exchange company in the United States and internationally. The company operates in two segments, Vacation Ownership and Exchange & Rentals. The Vacation Ownership segment develops, markets, and sells vacation ownership interests (VOIs) to individual consumers; provides consumer financing in connection with the sale of VOIs; and provides property management services at resorts. The Exchange & Rentals segment offers vacation exchange services and products to owners of VOIs; and manages and markets vacation rental properties primarily on behalf of independent owners. As of June 25, 2019, it had approximately 220 vacation ownership resorts. Wyndham Destinations, Inc. also has relationships with approximately 4,300 vacation ownership resorts. The company was formerly known as Wyndham Worldwide Corporation and changed its name to Wyndham Destinations, Inc. in May 2018. Wyndham Destinations, Inc. was founded in 1990 and is headquartered in Orlando, Florida.

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