Wyndham Destinations Reports Fourth Quarter and Full-Year 2019 Results; Increases Dividend 11% and Provides Full-Year 2020 Outlook

[HitchHiker71]

For anyone interested in how Wyndham is doing financially:

https://s22.q4cdn.com/457996430/files/doc_financials/2019/q4/WYND-4Q-2019-Earnings-Release.pdf

The summary/bullet points:

ORLANDO, Fla. (Feb. 26, 2020)—Wyndham Destinations, Inc. (NYSE:WYND), the world's largest vacation ownership and exchange company, today reported fourth quarter and full-year 2019 financial results for the period ended December 31, 2019. Highlights include:

• Net VOI sales increased 4% to $464 million; gross VOI sales increased 3% to $582 million in the fourth quarter
• Fourth quarter GAAP diluted EPS from continuing operations increased 57% to $1.73
• Adjusted diluted EPS from continuing operations in the fourth quarter increased 24% to $1.58
• Net income from continuing operations increased 46% to $155 million and adjusted net income from continuing operations increased 15% to $142 million in the fourth quarter
• Fourth quarter adjusted EBITDA increased 10% to $265 million(1)
• Delivered full-year net cash provided by operating activities from continuing operations of $453 million (55% increase) and adjusted free cash flow from continuing operations of $617 million(6% increase)
• Repurchased 7.6 million shares of common stock for $340 million in 2019
• Full-year 2020 Adjusted EBITDA is projected to be between $1.03 billion and $1.05 billion
• The Board of Directors authorized an 11% increase in the quarterly dividend to $0.50 per share

Michael D. Brown, president and CEO of Wyndham Destinations, noted, "In our first full year as a standalone public company, Wyndham Destinations delivered on our promise to provide value to shareholders through steady growth, strong margins and robust free cash flow. We are pleased with our fourth quarter and full-year results as adjusted EBITDA, gross VOI sales and tours each grew 4% in 2019."

 

[Braindead]

So Wyndhams sales & profits look good! But the owners end up paying for more bad debt from bad sales practices
In the 2020 budget for CWA:
Total Points increased to 48,264,033,449 from 43,325,581.816 about an additional 5 billion points
Bad debt increased to $19,268,510 [.40 of MFs ] from $11,711,836 [.27 of MFs ]

Bad debt went up almost 50% while total points only went up about 11.5%.
$.13 of the MF increase for CWA owners was due to the increased % of bad debt. Yes the owners left pay the bill

 

[dgalati]

For anyone interested in how Wyndham is doing financially:

https://s22.q4cdn.com/457996430/files/doc_financials/2019/q4/WYND-4Q-2019-Earnings-Release.pdf

The summary/bullet points:

ORLANDO, Fla. (Feb. 26, 2020)—Wyndham Destinations, Inc. (NYSE:WYND), the world's largest vacation ownership and exchange company, today reported fourth quarter and full-year 2019 financial results for the period ended December 31, 2019. Highlights include:

• Net VOI sales increased 4% to $464 million; gross VOI sales increased 3% to $582 million in the fourth quarter
• Fourth quarter GAAP diluted EPS from continuing operations increased 57% to $1.73
• Adjusted diluted EPS from continuing operations in the fourth quarter increased 24% to $1.58
• Net income from continuing operations increased 46% to $155 million and adjusted net income from continuing operations increased 15% to $142 million in the fourth quarter
• Fourth quarter adjusted EBITDA increased 10% to $265 million(1)
• Delivered full-year net cash provided by operating activities from continuing operations of $453 million (55% increase) and adjusted free cash flow from continuing operations of $617 million(6% increase)
• Repurchased 7.6 million shares of common stock for $340 million in 2019
• Full-year 2020 Adjusted EBITDA is projected to be between $1.03 billion and $1.05 billion
• The Board of Directors authorized an 11% increase in the quarterly dividend to $0.50 per share

Michael D. Brown, president and CEO of Wyndham Destinations, noted, "In our first full year as a standalone public company, Wyndham Destinations delivered on our promise to provide value to shareholders through steady growth, strong margins and robust free cash flow. We are pleased with our fourth quarter and full-year results as adjusted EBITDA, gross VOI sales and tours each grew 4% in 2019."

This is what @Fredflintstone was talking about. Why invest in buying timeshares when you can buy the stock and use the dividends to pay for rentals.

 

[dgalati]

This is what @Fredflintstone was talking about. Why invest in buying timeshares when you can buy the stock and use the dividends to pay for rentals.

Dividend at 4.5% just think if I can buy WYND at under $25 in the down turn. Then use Divi to pay for vacations. Brilliant!!! @Fredflintstone think about the possibilities.

 

[dgalati]

So Wyndhams sales & profits look good! But the owners end up paying for more bad debt from bad sales practices
In the 2020 budget for CWA:
Total Points increased to 48,264,033,449 from 43,325,581.816 about an additional 5 billion points
Bad debt increased to $19,268,510 [.40 of MFs ] from $11,711,836 [.27 of MFs ]

Bad debt went up almost 50% while total points only went up about 11.5%.
$.13 of the MF increase for CWA owners was due to the increased % of bad debt. Yes the owners left pay the bill

I would refer to this as letting VIP members use Resale points with VIP benefits. All members pay for this perk but it sounds like you don't want to pay for the cost associated with the sales practices that pay for your freebies. Where do you think Wyndham makes the money? Can you give some credit to resale buyers that pay pennies on the dollar if they are paying maintenance fees and not costing you as a owner? Besides Wyndham takes back deeds for $0 and sells at $150+/1000 SO WHAT IF A FEW DON'T PAY its just part of their business plan.

 

[dgalati]

Wait for the next down turn in the economy and watch how much bad debt goes up. Remember this is basically all unsecured debt just like a credit card at rates of 17% +

 

[Fredflintstone]

Dividend at 4.5% just think if I can buy WYND at under $25 in the down turn. Then use Divi to pay for vacations. Brilliant!!! @Fredflintstone think about the possibilities.

Yes, it’s a great strategy. You are right; buy on the dips. If you get it for 25 a share, the dividend percentage will be more like 8 percent. Even though there is a Coronavirus issue resulting in almost all travel and leisure stocks receiving a pounding, the advantages of buying timeshare companies as an investor are as follows:

1. The company has 100s of thousands of fee paying debtors ( they call owners) paying fees year in and year out. When you look at your contract, the essence is binding a debtor/creditor relationship.
2. These debtors get points that are time sensitive thus forcing them to travel and spend more money at the resorts.
3. You have a warm market of debtors coming in the door ready to receive “owner updates” and buy more upgrades.
4. Fees can be adjusted up and many times the increases exceed cost of inflation.
5. Even though debtors get a certain amount of points, you can raise the points needed at new resorts. This forces debtors to think about buying more points and garnering more contracts.
6. You can add fees (resort, wi fi, parking) etc. to increase cash flows.
7. Many timeshare developers garner more money by having a management arm business that charges the HOA to maintain the property thus bringing in more cash flow.
8. Rentals of units not attached to debtors bring in more dollars.
9. Clubs, exchange fees, premium memberships add more to the bottom line.
10. Every resort has partnerships/CO branding where commissions can be had.
11. Disaster strikes. No problem. Send a special assessment to the debtors.
12. Foreclosures, deed backs, etc. No problem. Place the inventory back up for sale and cash in on the retail sales.

I would rather be on the investor/shareholder side where I can get the dividends to use for travel. I still own the shares and can sell them on the stock exchange in seconds if I want. I will never have a resale problem and I doubt the shares will ever be only worth a buck.

Yes, @dgalati, it’s the way to go. As they say, “in the Casino business, would you rather be the gambler or the house collecting the gambler’s losses?”

It’s worked well for me. Actually, I will get my FA to buy more on the dips. More vacation cash for me.

Lastly, my FA put WYND to hedge and that is reaping in more cash. We may do calls at some point so more money goes into the account.


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[Fredflintstone]

Oh, and lastly, the developer can receive up to 10 times the real estate value of the condo by simply splitting the unit up into 52 weeks. Even if 50 percent goes into commissions, that’s still 5 times the value of the condo compared to selling it outright.


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[Fredflintstone]

Resales a problem? No, because the developer has already received the retail price. The best thing is is that it is up to the debtor to find a new debtor. Hey, now we can get transfer, club and other fees on the transaction. It’s a win win for the company and it’s shareholders.


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[dgalati]

Resales a problem? No, because the developer has already received the retail price. The best thing is is that it is up to the debtor to find a new debtor. Hey, now we can get transfer, club and other fees on the transaction. It’s a win win for the company and it’s shareholders.


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Smart money Always bets on the house to win. The odds are in their favor.

 

[Fredflintstone]

Hey,

WYND shares might be undervalued at this level. I bought some more today at 39.85. The 2500 I bought over a year ago was 37.75.

I talked with Investor relations. Due to their current rise in profits, dividends may go from .50 a share per quarter to .54 a share. Even at .50 a share per quarter, I now have 6 k to spend in vacations. I plan to gradually keep increasing on the dips.

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