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7 Great Travel Stocks to Buy for Q4

InvestorPlace - Stock Market News, Stock Advice & Trading Tips Travel stocks were hot in the first half of the year but the delta variant slowed them down in recent...

This story originally appeared on InvestorPlace

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Shine Nucha / Shutterstock - InvestorPlace

It finally looks like travel stocks are gaining traction again, even as we continue to deal with a new wave of delta variant.

Also, as we work through our second year of Covid, we’re managing to learn how to live with it and not let it paralyze us. Smart protocols are minimizing risks while allowing us to get back on the road for fun, family or business.

Some of the biggest winners at this point are resorts and hotels. Online apartment and house rentals came back faster since they didn’t have huge properties with hundreds of guests. One-family-one-location rentals — and motor homes — were more appealing.

But the hotels and resorts have upgraded their cleaning processes and open space protocols. And business is returning. Going into the holiday season, there’s a lot of optimism these quality companies will come roaring back, or in some cases, continue roaring higher.

  • Vail Resorts (NYSE:MTN)
  • Marriott International (NASDAQ:MAR)
  • Hilton Worldwide (NYSE:HLT)
  • Red Rock Resorts (NASDAQ:RRR)
  • Wyndham Hotels & Resorts (NYSE:WH)
  • Playa Resorts & Hotels (NASDAQ:PLYA)
  • Choice Hotels International (NYSE:CHH)

Travel Stocks to Buy: Vail Resorts (MTN)

Skis basking in the sun atop a snow-covered mountain.
Source: Shutterstock

The company operates beyond its namesake. Today, it operates 10 mountain resorts and three urban ski areas around the U.S. It also owns or operates condos and hotels in and around its properties.

Also bear in mind that ski resorts are now year-round operations so they don’t just rely on the white stuff to make the green stuff.

There has been great anticipation in the return to travel, and MTN has been caught up in that excitement, so it’s not incredibly cheap here. But it will be delivering strong numbers moving forward. And there will likely be new acquisitions as weaker resorts look for an exit.

MTN stock has gained 27% year-to-date and has a 1% dividend. It also has a current price-to-earnings ratio of 114x.

This stock has a B-rating in my Portfolio Grader.

Marriott International (MAR)

a pool with lounge chairs
Source: Shutterstock

As one of the world’s largest hotel chains, MAR lives by its occupancy rates. It’s also one of the bellwethers of travel stocks, especially lodging stocks. If it’s not doing well, few hotels are.

Things are looking up for MAR at this point. The stock is up 16% year-to-date. Yet it has a current P/E of 145x. You won’t be the first person to buy in with hopes of a recovery in its earnings.

However, MAR also has an expanding number of resorts around the world. Those self-sufficient properties will be very attractive as people begin to travel again. And its variety of price points will help as families travel for sports and holiday visits as well.

This stock has a B-rating in my Portfolio Grader.

Travel Stocks to Buy: Hilton Worldwide (HLT)

the sign in front of a Hilton (HLT) hotel
Source: josefkubes / Shutterstock.com

Just like its somewhat larger competitor MAR, HLT is another global force when it comes to travel stocks. And it will be a beneficiary of the rising market demand for lodging now that more people are hitting the road.

Whether it’s business, holidays, soccer tournaments or any other of the many reasons to hit the road, there’s almost always an HLT property near your destination. Delta has slowed the recovery a bit, but HLT has some of the most popular price-conscious hotels, which are still seeing demand. Also, the bigger chains can rely on continued demand growth in Asia.

HLT stock is up 30% year-to-date, but it’s still having trouble getting back to positive earnings.

This stock has a B-rating in my Portfolio Grader.

Red Rock Resorts (RRR)

a sign displaying Las Vegas Nevada
Source: Shutterstock

If you’re missing Las Vegas, then you’re likely missing an RRR property for your R&R. For more than three decades RRR has been operating nearly a dozen casinos and resorts in Las Vegas and a similar number in Henderson, Nevada.

And as the fall and winter roll around, Nevada is especially attractive since the weather cools off and outdoor activities become a bigger part of enjoying these desert wonderlands. Its brands include Station Casinos and Wildfire Gaming.

RRR has a $6 billion market cap, so it’s not a big-name player but business is improving, as is the stock. RRR stock is up 114% year to date, yet it only trades at a current PE of 52.

This stock has an A-rating in my Portfolio Grader.

Travel Stocks to Buy: Wyndham Resorts & Hotels (WH)

A sign for Wyndham Hotels & Resorts (WH) in bright blue.
Source: Mihai_Andritoiu / Shutterstock.com

Sitting at around $7 billion WH has a market cap that’s just a fraction of the bigger travel stocks in this collection. But it has 21 brands in 95 countries with more than 8,900 hotels.

Some of its brands are very familiar — Super 8, Ramada, La Quinta, Microtel and Wyndham  for example — but it has a number of boutique and luxury brands on top of these as well. Again, having price points for every budget, and every trip is very helpful as the lodging sector regains its footing here and abroad.

WH stock is up 40% year-to-date and has a current P/E of 66x. That’s not cheap, but it’s already generating positive earnings and can continue to hit singles and doubles until the market opens up more.

This stock has a B-rating in my Portfolio Grader.

Playa Resorts & Hotels (PLYA)

aerial shot of a beach
Source: Shutterstock

Ah the Caribbean. This is where PLYA plies its trade. The Netherlands-based company runs all-inclusive resorts in the Caribbean and Mexico for brands like Hyatt, HLT, Panama Jack and Jewel.

PLYA has a $1.4 billion market cap, so it’s fundamentally a management company that knows how to manage all-inclusive resorts. This kind of vacationing is becoming popular with Americans that are interested in the convenience of a having everything in one place, without the travel issues of a cruise ship.

And as older populations in the West continue rise, this type of holiday will grow in demand. Many Europeans have been travelling this way for decades, especially to soak up Caribbean sun.

PLYA stock has risen 61% year-to-date, but it’s still coming back from a difficult 2020 … and a slow first half of 2021.

This stock has a B-rating in my Portfolio Grader.

Travel Stocks to Buy: Choice Hotels International (CHH)

A magnifying glass zooms in on the Choice Hotels (CHH) website.
Source: II.studio / Shutterstock.com

From EconoLodge, Comfort Inn, Quality Inn to Mainstay Suites and Clarion to Ascend, CHH has 12 brands, over 7000 hotels in more than 40 countries.

In the U.S., CHH has a big share of the budget market, which is one of the more resilient sectors. Travel sports and quick family trips as well as weigh stations on multi-day long distance trips are big business, especially in the U.S. And CHH is one of the leaders in giving travelers a comfortable, clean place to lay their heads.

Q4 should see CHH business increase as the holidays arrive. It’s also adding new hotels to its up-market Ascend line and making build out of its Cambria line more efficient and attractive to potential operators in secondary and leisure markets.

CHH stock has risen 27% year-to-date and trades at a current P/E of 56x.

This stock has a B-rating in my Portfolio Grader.

On the date of publication, Louis Navellier has no positions in the stocks in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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