By Rob Otman
Marriott (Nasdaq: MAR) is a $38 billion company today. Investors that bought shares one year ago are sitting on a 41.67% total return. That’s above the S&P 500’s return of 19.48%.
Marriott stock is beating the market, and it beat earnings estimates yesterday. But does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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Earnings-per-Share (EPS) Growth: Marriott reported a recent EPS growth rate of 10.47%. That’s below the hotels, restaurants & leisure industry average of 63.78%. That’s not a good sign. We like to see companies that have higher earnings growth.
Price-to-Earnings (P/E): The average price-to-earnings ratio of the hotels, restaurants & leisure industry is 31.22. And Marriott’s ratio comes in at 26.04. It’s trading at a better value than many of its competitors.
Debt-to-Equity: The debt-to-equity ratio for Marriott stock is 158.78. That’s below the hotels, restaurants & leisure industry average of 185.91. The company is less leveraged.
Free Cash Flow per Share Growth: Marriott’s FCF has been lower than its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
Profit Margins: The profit margin of Marriott comes in at 6.56% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Marriott’s profit margin is below the hotels, restaurants & leisure average of 12.37%. So that’s a negative indicator for investors.
Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Marriott is 17.43%, and that’s below its industry average ROE of 20.52%.
Marriott stock passes two of our six key metrics today. That’s why our Investment U Stock Grader rates it as a hold with caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.
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Source:: Investment You
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