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Is Hilton’s Stock Expensive?

Hilton Stock Rises on Strong 2Q15 Results and Good Outlook

(Continued from Prior Part)

New dividend policy

Hilton Worldwide was listed in 2013 and has not paid a dividend to date. However, the company initiated a new dividend policy this quarter under which it would pay a quarterly dividend of $0.07 per share. The company expressed its intention to grow dividends over time and would aim at maintaining a target payout ratio of 30% to 40% of recurring cash flow. This new dividend policy is expected to draw positive attention from investors.

PE multiple

Hilton stock currently has a high PE (price to earnings) ratio of about 39 as compared to Marriott’s (MAR) 24, Starwood’s (HOT) 22, Wyndham’s...