MARRIOTT VACATIONS WORLDWIDE Corp (NYSE: VAC)

Sector: Consumer Cyclical Industry: Resorts & Casinos CIK: 0001524358
Market Cap 2.27 Bn
P/B 0.68
P/E 52.83
P/S 0.66
ROIC (Qtr) -9.44
Div Yield % 4.34
Rev 1y % (Qtr) -3.22
Total Debt (Qtr) 5.64 Bn
Debt/Equity (Qtr) 2.29
Add ratio to table...

About

Marriott Vacations Worldwide Corp (VAC) is a leading global vacation company that operates in the hospitality and tourism industry. The company offers a comprehensive range of services including vacation ownership, exchange, rental, and resort management. As a pioneer in the vacation ownership industry, Marriott Vacations Worldwide has established a strong presence in the market since its inception in 1984. Marriott Vacations Worldwide generates revenue through various channels such as the sale of vacation ownership products, resort management...

Read more

Investment thesis

Bull case

  • Tangible assets of 6.29B provide exceptional 18.27x coverage of deferred revenue 344M, showing strong service capability backing.
  • Cash reserves of 733M provide ample 91.62x coverage of acquisition spending 8M, enabling strategic growth opportunities.
  • Strong free cash flow of 63M provides 7.88x coverage of acquisition spending 8M, indicating disciplined M&A strategy.
  • Strong tangible asset base of 6.29B provides 785.62x coverage of acquisition spending 8M, enabling strategic growth.
  • Cash position of 733M provides strong 2.13x coverage of deferred revenue 344M, ensuring service delivery capability.

Bear case

  • Operating cash flow of 122M barely covers its investment activities of (66M), with a coverage ratio of -1.85, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 122M provides thin coverage of dividend payments of (136M) with a -0.90 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 122M provides insufficient coverage of deferred revenue obligations of 344M, which is 0.35x, raising concerns about future service delivery capabilities.
  • High receivables of 2.92B relative to inventory of 727M (4.02 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 122M shows concerning coverage of stock compensation expenses of 37M, with a 3.30 ratio indicating potential earnings quality issues.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Resorts & Casinos
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LVS Las Vegas Sands Corp 39.82 Bn 24.48 3.06 15.78 Bn
2 WYNN Wynn Resorts Ltd 20.12 Bn 2,860.00 4.09 12.20 Bn
3 MGM MGM Resorts International 9.16 Bn 44.51 0.52 31.26 Bn
4 BYD Boyd Gaming Corp 8.33 Bn -92.47 2.92 2.46 Bn
5 MTN Vail Resorts Inc 4.91 Bn 196.79 4.35 3.38 Bn
6 HGV Hilton Grand Vacations Inc. 4.44 Bn 83.82 0.89 7.28 Bn
7 CZR Caesars Entertainment, Inc. 3.93 Bn -7.83 0.34 24.88 Bn
8 RRR Red Rock Resorts, Inc. 3.66 Bn 20.78 2.12 3.41 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.54 1.18
EV to Cash from Ops. EV/CFO 53.69 39.36
EV to Debt EV to Debt 0.97 32.02
EV to EBIT EV/EBIT 31.84 44.55
EV to EBITDA EV/EBITDA 19.28 19.91
EV to Free Cash Flow [EV/FCF] EV/FCF 99.56 -82.04
EV to Market Cap EV to Market Cap 2.41 4.40
EV to Revenue EV/Rev 1.60 4.33
Price to Book Value [P/B] P/B 0.68 3.49
Price to Earnings [P/E] P/E 52.83 199.09
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.27 2.40
Dividend Payout Ratio % Div Payout % (Qtr) 64.10 38.73
Dividend per Basic Share Div per Share (Qtr) 3.16 1.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 173.53 21.58
Interest Coverage Int. cover (Qtr) 2.56 -1.90
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 50.42 7.02
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 34.00 3.69
Dividend Growth (1y) % Div 1y % (Qtr) 3.95 6.21
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -7.87 -15.96
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -13.01 -13.29
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.58 -1.32
EBT Growth (1y) % EBT 1y % (Qtr) -18.21 -10.90
EPS Growth (1y) % EPS 1y % (Qtr) -14.11 9.03
FCF Growth (1y) % FCF 1y % (Qtr) -8.70 81.04
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.87 4.33
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.50 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.75 0.11
Cash Ratio Cash Ratio 0.00 0.59
Current Ratio Current Ratio 0.00 0.90
Debt to Equity Ratio Debt/Equity (Qtr) 2.29 4.57
Interest Cover Ratio Int Coverage (Qtr) 2.56 -1.90
Times Interest Earned Times Interest Earned (Qtr) 2.56 -1.90
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.30 18.45
EBIT Margin % EBIT Margin % (Qtr) 8.34 11.71
EBT Margin % EBT Margin % (Qtr) 5.08 4.06
Gross Margin % Gross Margin % (Qtr) 39.90 47.91
Net Profit Margin % Net Margin % (Qtr) 3.40 2.46