Travel + Leisure Co. Increases Cash Dividend 11%

Rhea-AI Summary

Travel + Leisure Co. (TNL) announces an 11% increase in its quarterly dividend rate to $0.50 per share from $0.45 per share. The dividend is payable on March 29, 2024, to shareholders of record as of March 21, 2024. The company's decision reflects confidence in growth prospects and cash generation.

Positive

• Travel + Leisure Co. (TNL) increases its quarterly dividend rate by 11% to $0.50 per share.
• The dividend is payable on March 29, 2024, to shareholders of record as of March 21, 2024.
• The board's decision showcases confidence in growth prospects and cash generation capabilities.
• The company's CFO emphasizes the commitment to returning cash to shareholders and effective capital allocation strategies.

Negative

• None.

Insights

Financial Analyst

The declaration of an increased dividend by Travel + Leisure Co. signals a robust financial posture and a commitment to shareholder returns. The 11% hike in the quarterly dividend to $0.50 per share from the previous $0.45 is a substantial increment, which suggests that the company has a positive outlook on its cash flow and profitability. This move might attract income-focused investors, potentially leading to an increased demand for the stock.

It's important to consider the dividend yield, which is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. An increase in dividends can affect this yield and make the stock more attractive if the price remains stable or grows at a slower pace than the dividend increase. Moreover, the company's capital allocation strategy, including share repurchases, organic growth investments and potential M&A activities, indicates a comprehensive approach to utilizing its capital for driving shareholder value.

Market Research Analyst

The travel and leisure industry has been recovering post-pandemic and Travel + Leisure Co.'s decision to increase dividends likely reflects the company's confidence in the industry's continued growth. This confidence is also supported by the CFO's statement regarding the company's prospects for growth. An increased dividend can be seen as a signal to the market about the company's future performance expectations.

However, it is essential to monitor the company's ability to sustain this increased dividend through its future earnings and cash flow. Investors should be aware that a high dividend payout, if not supported by solid financial health, can become unsustainable in the long term. Therefore, analyzing the company's earnings, payout ratio and free cash flow is crucial in assessing the sustainability of the dividend increase.

Economist

In the broader economic context, dividend policy changes can be influenced by macroeconomic factors like interest rates and economic growth. In a low-interest-rate environment, higher dividends might be particularly attractive as they offer better returns than many fixed-income alternatives. However, as interest rates rise, the relative attractiveness of dividend stocks may diminish unless they can maintain a yield advantage.

Furthermore, the travel and leisure sector's performance is closely tied to consumer discretionary spending, which is affected by economic cycles. In periods of economic expansion, consumers are more likely to increase spending on travel and leisure, benefiting companies like Travel + Leisure Co. Conversely, during economic downturns, such companies might face challenges in maintaining their financial performance and, by extension, their dividend payouts.

ORLANDO, Fla.--(BUSINESS WIRE)-- The board of directors of Travel + Leisure Co. (NYSE:TNL) declared a regular cash dividend on the company’s common stock, increasing the quarterly dividend rate by 11% to $0.50 per share from $0.45 per share. The dividend is payable March 29, 2024 to shareholders of record as of March 21, 2024.

“The board’s decision to increase the dividend reflects our continued confidence in our strong prospects for growth and our ongoing ability to generate significant amounts of cash after funding the capital needs of the business. The dividend demonstrates our commitment to return cash to shareholders, a priority in our balanced and effective capital allocation strategy, which also includes share repurchases, investing in organic growth, enhancing our balance sheet and pursuing opportunistic M&A when appropriate,” said Mike Hug, Chief Financial Officer of Travel + Leisure Co.

About Travel + Leisure Co.

As the world’s leading membership and leisure travel company, Travel + Leisure Co. (NYSE:TNL) transformed the way families vacation with the introduction of the most dynamic points-based vacation ownership program at Club Wyndham, and the first vacation exchange network, RCI. The company delivers more than six million vacations each year at 245+ timeshare resorts worldwide, through tailored travel and membership products, and via Travel + Leisure GO - the signature subscription travel club inspired by the pages of Travel + Leisure magazine. With hospitality and responsible tourism at the heart of all we do, our 19,000+ dedicated associates bring out the best in people and places around the globe. We put the world on vacation. Learn more at travelandleisureco.com.

Forward-Looking Statements

This press release includes “forward-looking statements” as that term is defined by the Securities and Exchange Commission (“SEC”). Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions or strategies regarding the future. In some cases, forward-looking statements can be identified by the use of words such as “will,” “intends,” or “expects,” or other words of similar meaning. Forward-looking statements are subject to risks and uncertainties that could cause actual results of Travel + Leisure Co. and its subsidiaries (“Travel + Leisure Co.” or “we”) to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that might cause such a difference include, but are not limited to, risks associated with: the future prospects and plans for Travel + Leisure Co., including our ability to compete in the highly competitive timeshare and leisure travel industries; the health of the travel industry and declines or disruptions caused by adverse economic conditions (including inflation, higher interest rates, and recessionary pressures), terrorism or acts of gun violence, political strife, war (including hostilities in Ukraine and the Middle East), pandemics, and severe weather events and other natural disasters; adverse changes in consumer travel and vacation patterns, consumer preferences and demand for our products; increased or unanticipated operating costs and other inherent business risks; our ability to comply with financial and restrictive covenants under our indebtedness; our ability to access capital and insurance markets on reasonable terms, at a reasonable cost or at all; maintaining the integrity of internal or customer data and protecting our systems from cyber-attacks; and those other factors disclosed as risks under “Risk Factors” in documents we have filed with the SEC, including in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 21, 2024. We caution readers that any such statements are based on currently available operational, financial and competitive information, and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Except as required by law, we undertake no obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240313027297/en/

Investor Contact:

Kendrick Calilao

Investor Relations

(407) 626-4487

Kendrick.Calilao@travelandleisure.com

Media Contact:

Steven Goldsmith

Public Relations

(407) 626-5882

Steven.Goldsmith@travelandleisure.com

Source: Travel + Leisure Co.

FAQ

What is the new quarterly dividend rate announced by Travel + Leisure Co. (TNL)?

Travel + Leisure Co. (TNL) has announced an increase in its quarterly dividend rate by 11% to $0.50 per share from $0.45 per share.

When will the dividend be payable to shareholders of Travel + Leisure Co. (TNL)?

The dividend declared by Travel + Leisure Co. (TNL) will be payable on March 29, 2024, to shareholders of record as of March 21, 2024.

Why did the board of directors decide to increase the dividend for Travel + Leisure Co. (TNL)?

The board's decision to increase the dividend reflects confidence in the company's growth prospects and its ability to generate significant cash after funding capital needs.

What does the CFO of Travel + Leisure Co. (TNL) emphasize regarding the dividend increase?

The CFO highlights the commitment to returning cash to shareholders, which is a priority in the company's balanced and effective capital allocation strategy.