Travel still remains below its pandemic levels, however, that could change this year. Companies in the travel and tourism space report robust demand, even with other parts of the economy showing a decline.
One area with reasonable upside here is in hotel-related companies. That’s because booking trends have proven strong, even going into the new year and past the holiday season.
Among the hotel stocks, Marriott (MAR) looks well-positioned here. The hotel chain just beat on earnings, and the stock is fairly valued at 21 times forward earnings, down from 30 times last year.
With bookings on the rise, Marriott will likely be able to extend its 39 percent jump in revenues from last year. Earnings soared 186 percent last year – a level that likely won’t be beat this year, but should still trend higher.
Action to take: Investors may like shares under $185. At current prices, the stock yields about 0.9 percent. The company just upped its dividend payment from $0.60 annually to $1.60 – a big jump that may moderate in the years ahead, but still has room to grow.
For traders, shares are likely to continue trending higher in the coming weeks. The April $190 calls, last going for about $4.50, offer mid-double-digit returns to leverage that move.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.