Bull of the Day: Marriott Vacations (VAC) - Bull of the Day

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Marriott Vacations Worldwide Corporation ( VAC ) is cashing in on a return to travel. This Zacks Rank #1 (Strong Buy) recently raised its 2015 guidance.

Marriott Vacations is a timeshare company which manages 58 resorts with about 415,000 owners and member worldwide. Its brands include Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott.

It was spun off from Marriott International in 2011.

A Big Beat in the First Quarter

On Apr 30, Marriott Vacations reported its first quarter results and blew by the Zacks Consensus Estimate by 23%. Earnings were $0.85 compared to the consensus of $0.69.

Tourists are still traveling in North America. Company vacation ownership contract sales, excluding residential sales, rose 9.5% to $170 million year over year but North America was strong, with vacation ownership contract sales jumping 11% to $156 million.

North American volume per guest (VPG) grew 4.7% year over year with North America tours also rising 5.3%.

Raised Full Year Guidance

Momentum accelerated into 2015 after a solid 2014.

Marriott Vacations raised its estimates for company contracts sales growth, excluding residential, to a range of 5% to 8% from 4% to 7%.

Earnings were also boosted to between $3.29 - $3.48 from $3.16 - $3.35.

The analysts are even more bullish as the 2015 Zacks Consensus Estimate now stands at $3.47, or at the very high end of the company's range. That is earnings growth of 18.3% over 2014.

The analysts are also bullish on 2016. They see another 16% earnings growth.

Shares Near All Time High

If you got in when the stock was spun-off from the parent Marriott in 2011 it has been quite a ride.

Shares are still trading near their all-time high.

They're no longer cheap, with a forward P/E of 25.3. That's well above the average of the S&P 500 which is 18.1.

But the company has started rewarding shareholders with a dividend, with a current yield of 1.1%. It also bought back $51 million in stock in the first quarter.

Investors are obviously getting in for the growth, and not the value.

For investors looking for a way to play the surging travel demand and hot hotel market, Marriott Vacations is one to keep on your short list.

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Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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