Wyndham Hotels & Resorts, Inc. WH recently announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 8%, which indicates WH’s intention to utilize free cash to boost its shareholders’ returns.

WH increased its quarterly dividend to 41 cents per share (or $1.64 annually) from the previous payout of 38 cents (or $1.52 annually). The hiked dividend will be paid out on (or around) March 31, 2025, to its shareholders on record as of March 17. Based on the closing price of $104.37 per share yesterday, the stock has a dividend yield of 1.6%.

The company's dividend increase highlights its focus on improving shareholder returns. Investors always prefer a return-generating stock. A high-dividend-yielding one is much coveted. It goes without saying that stockholders are always on the lookout for companies with a track record of consistent and incremental dividend payments.

Factors Supporting WH’s Dividend Hikes

Shares of Wyndham have gained 41.2% in the past six months compared with the Zacks Hotels and Motels industry’s 20.4% growth. The company has been benefiting from strong global RevPAR growth backed by strong weekday business bookings and steady weekend leisure demand in the United States. Expansion into higher FeePAR markets, a focus on extended-stay growth and new revenue streams continue to support its overall performance.

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In the fourth quarter of 2024, global RevPAR increased 5% year over year in constant currency, with 5% growth in the United States and 6% internationally. The company’s retention rate improved 10 basis points year over year, reaching a record 95.7% by the end of the year.

Furthermore, Wyndham is focused on expanding its geographic footprint and product offerings across all segments by leveraging diversified brand portfolio. This accretive aim of the company is backed by its disciplined capital allocation strategy, which encompasses investments in high-return businesses accompanied by strategic collaborations and buyouts.

In 2024, Wyndham Hotels opened 68,700 rooms globally, up 4% year over year, including about 28,000 rooms in the United States. As of Dec. 31, 2024, the company’s global development pipeline comprised approximately 2,100 hotels and 252,000 rooms, indicating 5% year-over-year growth.

WH’s Zacks Rank & Key Picks

Wyndham Hotels currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Consumer Discretionary sector include:

Royal Caribbean Cruises Ltd. RCL currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

RCL delivered a trailing four-quarter earnings surprise of 16%, on average. The stock has rallied 61% in the past year. The Zacks Consensus Estimate for RCL’s 2025 sales and earnings per share (EPS) indicates growth of 9.1% and 26.2%, respectively, from the year-ago levels.

American Outdoor Brands, Inc. AOUT carries a Zacks Rank of 2. AOUT delivered a trailing four-quarter earnings surprise of 70.6%, on average. The stock has appreciated 36% in the past year.

The consensus estimate for AOUT’s fiscal 2025 sales and EPS implies growth of 3.2% and 75%, respectively, from the year-ago levels.

Carnival Corporation & plc CCL currently carries a Zacks Rank of 2. CCL delivered a trailing four-quarter earnings surprise of 326.4%, on average. The stock has surged 60.8% in the past year.

The Zacks Consensus Estimate for CCL’s fiscal 2025 sales and EPS indicates an increase of 4% and 25.4%, respectively, from year-ago levels.

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This article originally published on Zacks Investment Research (zacks.com).

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