Hilton spinoffs just getting started

Article Excerpt

Hilton Worldwide’s spinoff of two of its businesses in January 2017 let the parent focus on franchising its high-quality hotel brands and managing those operations for a fee. Income from those fees, which vary with the opening of new rooms and occupancy rates, now supplies over 90% of its earnings. As a result, the stock has jumped 60% since the split. The two new firms have yet to see the same kind of gains. Hilton Grand Vacations (timeshare properties) is up 12%, while Park Hotels (luxury hotels) has slid 2%. That’s typical for new spinoffs, which are working to build a following among analysts and investors. We still like the outlook for all three, particularly the two spinoffs. They could see gains similar to those of their former parent following the split. HILTON WORLDWIDE HOLDINGS INC. $96 (New York symbol HLT; Consumer Sector; Shares outstanding: 291.1 million; Market cap: $27.9 billion; Dividend yield 0.6%; Takeover Target Rating: Low; www.hiltonworldwide.com) owns, manages and franchises hotels under several…

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