Marriott International

Methodology

Marriott's asset-light franchise model generates relatively stable earnings compared to hotel REITs, though results remain tied to RevPAR cycles and business travel trends. Management fees and franchise royalties create more predictable revenue than property ownership. The calculation works reasonably well though requires normalization during extreme travel disruptions or economic downturns.

Methodology

Marriott's PEG ratio should reflect the asset-light model's superior margins and returns compared to property-owning competitors. During lodging recoveries, growth rates can appear very high off depressed bases, creating misleadingly low PEG ratios. Compare to historical ranges and consider sustainable mid-cycle growth from unit expansion and loyalty program strength.

Methodology

Marriott offers a modest dividend with management balancing shareholder returns against unit development support and strategic investments. The dividend adds some value though capital appreciation potential from loyalty program growth and unit expansion matters more. PEGY better captures total return expectations for this brand-focused hospitality company.