For over a decade, leading hotelier,
Starwood Hotels & Resorts Worldwide, Inc.
) has been returning wealth to shareholders through regular
dividends, stock buybacks and special dividends. Since then, the
company has returned approximately $10.0 billion of cash to its
shareholders. The company has now decided to shift its mode of
dividend payment to a quarterly payout schedule and also
announced a special dividend.
Starwood Hotels will pay its first quarterly dividend of 35 cents
per share and a special dividend of 65 cents per share on Mar 28,
2014 to stockholders of record as of Mar 11, 2014. The
announcement of a special dividend comes in the wake of $500.0
million cash received from the sale of the St. Regis Bal Harbour
residential project, which it wants to distribute among its
In an effort to enhance shareholder value, the company has been
increasing its dividend at regular intervals. In Oct 2013, the
hotelier raised its annual cash dividend by 8.0% to $1.35 per
share. Earlier, in 2012, 2011 and 2010, Starwood raised its
dividend by a respective 150.0%, 67% and 50%.
Like Starwood, another hospitality company
Wyndham Worldwide Corporation
) has also been making share buybacks. During 2013, Starwood
repurchased 4.9 million shares for $315.6 million and has $614.0
million available under its share repurchase authorization. The
share buyback will help the company reduce outstanding share
count, thereby increasing earnings per share and return on
Increase in share buyback authorization and quarterly dividend
payments affirm the company's optimistic outlook and growth
prospects. Moreover, since the company regularly divests assets;
it would likely bring in more special dividends, going forward.
This Zacks Rank #4 (Sell) company posted mixed fourth quarter
2013 results on feb 13, 2014 with earnings beating the Zacks
Consensus Estimate and revenues missing the same. Some
better-ranked stocks in the hotel industry include
Extended Stay America, Inc.
Marriott International, Inc.
). Both these stocks hold a Zacks Rank #2 (Buy).
STARWOOD HOTELS (HOT): Free Stock Analysis
MARRIOTT INTL-A (MAR): Free Stock Analysis
EXTENDED STAY (STAY): Free Stock Analysis
WYNDHAM WORLDWD (WYN): Free Stock Analysis
To read this article on Zacks.com click here.