The newly announced Hilton IPO is expected to dwarf Twitter's. So do hotel stocks still have room available?
Typical wisdom holds that the markets can be rather subdued at the end of the year. This makes December a less attractive time for companies to go public, because the basic idea of a stock sale is to take advantage of enthusiasm to raise as much money for the company as you can. Therefore, year-end IPOs are typically a bit unusual.
Unless you're taking part in the biggest year for IPOs in almost a decade – that is, since 2004 by Bloomberg's count. This year the IPOs keep on coming, with no sign of letting off.
For one there are reports swirling that Chrysler is proceeding with its plans for a 2013 IPO, and that it could be completed before the end of the year. The deal hit some roadblocks as two of the company's biggest private shareholders – Fiat and the United Autoworkers Union – sparred over the terms of the deal.
But an even larger IPO was announced this morning by Hilton Worldwide Holdings Inc. One of the oldest and most storied hospitality chains in America – Hilton was purchased by the private equity firm Blackstone (BX) in 2007. Hilton had an enormous amount of debt which Blackstone refinanced, and hopes to cut down or even eliminate debt with new cash from the stock sale.
Hilton will be the second largest IPO of the year, right behind Plains GP Holdings (PAGP), and even larger than Twitter (TWTR)'s much discussed offering last month. Hilton and Blackstone hope to capitalize on a bull market, as well as a recovery in some of the major metrics that concern travel and hospitality providers.
With a company like Hilton – which owns a number of high-end brands such as Waldorf Astoria – higher consumer confidence among the wealthy is a particularly welcome development.
Hotel stocks in general have performed exceptionally well throughout 2012 and much of 2013. Occupancy and pricing went up around 4.5% this year. As the entire market starts to reach higher and higher valuations, hotels are emerging as one of the few remaining growth industries looking into 2014, especially in emerging markets.
Hilton obviously hopes that trend will continue, as it expects to raise about $2.5 billion with its IPO. While we're waiting for their offering, are there other investing ideas among hotel stocks? We compiled a list of hospitality and lodging stocks to consider.
Click on the interactive chart to view market capitalization for these stocks over time.
Do you see growth opportunities in the hotel industry? Use the list below to begin your own analysis.
1. Hyatt Hotels Corporation (H, Earnings, Analysts, Financials): Engages in the management, franchising, ownership, and development of Hyatt-branded hotels worldwide. Market cap at $7.75B, most recent closing price at $48.37.
4. Marriott International, Inc. (MAR, Earnings, Analysts, Financials): Operates and franchises hotels and related lodging facilities worldwide. Market cap at $14.07B, most recent closing price at $47.02.
5. Wyndham Worldwide Corporation (WYN, Earnings, Analysts, Financials): Provides various hospitality products and services to individual consumers and business customers in the United States and internationally. Market cap at $9.44B, most recent closing price at $71.71.
(List compiled by James Dennin. Analyst ratings sourced from Zacks Investment Research, all other data sourced from Finviz.)
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Hyatt Hotels Corporation(H, Chart, Download SEC Filings)
- Starwood Hotels & Resorts Worldwide Inc.(HOT, Chart, Download SEC Filings)
- Intercontinental Hotels Group plc(IHG, Chart, Download SEC Filings)
- Marriott International, Inc.(MAR, Chart, Download SEC Filings)
- Wyndham Worldwide Corporation(WYN, Chart, Download SEC Filings)
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