Stock Analysis

Shareholders Of Hilton Worldwide Holdings (NYSE:HLT) Must Be Happy With Their 228% Total Return

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NYSE:HLT
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When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term Hilton Worldwide Holdings Inc. (NYSE:HLT) shareholders would be well aware of this, since the stock is up 116% in five years. Also pleasing for shareholders was the 27% gain in the last three months. But this could be related to the strong market, which is up 12% in the last three months.

View our latest analysis for Hilton Worldwide Holdings

Given that Hilton Worldwide Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 5 years Hilton Worldwide Holdings saw its revenue shrink by 3.8% per year. On the other hand, the share price done the opposite, gaining 17%, compound, each year. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, this situation makes us a little wary of the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
NYSE:HLT Earnings and Revenue Growth January 13th 2021

Hilton Worldwide Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

What about the Total Shareholder Return (TSR)?

We've already covered Hilton Worldwide Holdings' share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Hilton Worldwide Holdings' TSR of 228% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Hilton Worldwide Holdings provided a TSR of 3.1% over the last twelve months. But that was short of the market average. If we look back over five years, the returns are even better, coming in at 27% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Hilton Worldwide Holdings better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Hilton Worldwide Holdings (at least 1 which is significant) , and understanding them should be part of your investment process.

Of course Hilton Worldwide Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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