WYNDHAM WORLDWIDE $91.39 - New York symbol WYN

WYNDHAM WORLDWIDE $91.39 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 123.3 million; Market cap: $10.9 billion; Dividend yield: 1.5%) is one of the world’s largest hospitality companies, with 7,650 franchised hotels and over 661,000 rooms worldwide.

Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has 107,000 vacation-rental properties in 100 countries.

In the three months ended December 31, 2014, Wyndham’s revenue rose 3.0%, to $1.23 billion from $1.20 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up its occupancy rate by 3.1%.

Before one-time items, earnings gained 23.3%, to $0.90 a share from $0.73. Wyndham continues to buy back its stock. In 2014, it repurchased 8.6 million shares for $652 million. In 2013, the company bought back 9.7 million shares for $590 million.

Goodwill on the rise

Wyndham has just increased its quarterly dividend by 20.0%, to $0.42 a share from $0.35. The stock now yields 1.5%.

However, Wyndham continues to grow quickly by acquiring vacation resorts and adding new hotels. The company’s goodwill and intangibles now stand at $2.7 billion, or 25% of its market cap. That leaves it vulnerable to writedowns if demand for vacation travel falls suddenly.

Wyndham is a hold.

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