High-quality investments -- those stocks that you can count on for guaranteed profits over the long haul -- have certain key qualities you should look for. One is a well-established brand name that is recognized by millions of potential customers. Another is the willingness to make bold moves that will lead to explosive growth.
The Bethesda, Md.-based company, founded in 1927, has more than 4,087 properties in more than 80 countries around the world, and is one of the most recognizable names in the travel and hospitality business.
But rather than rest on its laurels, Marriott is in the process of completing its $13.6 billion takeover of Starwood Hotels & Resorts Worldwide. This deal will extend the company's global reach even further and should give it a decisive advantage over rivals such as Hilton and InterContinental Hotels.
The merger will create a company with more than 1.1 million rooms in some 5,500 properties. It has already been approved by regulatory authorities representing more than 40 countries worldwide, including the U.S., the European Union, Canada, Japan, Mexico, South Africa, South Korea and Turkey.
The only holdout is China, where authorities are still reviewing the deal. But when it gets the approval of China's Ministry of Commerce, as it likely will, that could provide a big boost to the stock price. A decision is expected in the next 60 days.
"With daily room rates and occupancy levels at all-time highs in many major markets, basic economics dictate that less competition will only lead to even higher prices and more challenging negotiations," concluded a report from CWT Solutions Group, a travel industry consulting group.
The group found that Marriott will have nearly one-third -- and in some cases, half -- of the corporate travel hotel spend in 14 of the world's top 20 cities, including New York, Chicago, Mexico City and Shanghai.
The combined company will also have an advantage over its competitors in gathering data on the preferences and future plans of millions of travelers.
Even before the Starwood assets are added, Marriott's financials were already strong. It reported net income totaling $247 million in the second quarter, compared with $240 million in the year-ago quarter. Earnings per share came in at 96 cents in the quarter, compared with 87 cents in the second quarter of 2015.
Second-quarter 2016 adjusted net income totaled $265 million, a 10% increase over 2015 second quarter net income.
The company added nearly 11,000 rooms to its portfolio during the quarter, with one-third of those rooms in markets outside North America. Marriott added 80 new properties to its portfolio during this period, including such far-flung locations as Macedonia and Belarus.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.