If there is one area of the economy that is running smoothly, it would have to be consumer spending. Consumers continue to open their wallets and spend left-over pandemic stimulus cash. Meanwhile, the robust labor market has supported additional spending. For those firms, like our latest Best Dividend Capture Stocks List pick, that have continued to tap into this trend, profits have continued to surge!
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick taps into a very specific niche of consumer spending. We’re talking about travel. As one of the largest hotel chains on the planet, our pick has more than 9,100 affiliated hotels worldwide and over 850,000 hotel rooms. The key for our pick is that it does not actually own or run the hotels, but franchises its brands to external owners/operators. This reduces the risk for our pick, boosts its margins and, ultimately, its cash flows. Better still is that our pick’s brands encompass the range of value-friendly and full-service hotels. This allows it to court all kinds of consumers.
Our pick has managed to find growth as well. New forays into additional brands and long-stay hotels have added additional customers. Meanwhile, our pick has been smart with M&A. Our pick recently made a major purchase of a private equity-owned brand which added plenty of extra hotel muscle to its portfolio. Additionally, our pick has been targeted by a buyout. With that still pending, analysts estimate that other suitors or our pick could turn the table and start conducting more buyouts in the sector.
With consumers still spending on travel, our pick has continued to generate hefty cash from its operations. This fact has made our pick a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Tuesday, December 12, our pick is primed for the strategy, as is evident by its historical track record of a recovery period within an average of 9.1 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest hotel & lodging pick could be a lucrative option.
