The Zacks Analyst Blog Highlights: Starwood Hotels & Resorts Worldwide, Potash Corp. of Sakatchewan, CF Industries Holdings, Agrium and Mosaic
For Immediate Release
Chicago, IL – May 17, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Starwood Hotels & Resorts Worldwide Inc. (HOT), Potash Corp. of Sakatchewan Inc. (POT), CF Industries Holdings, Inc. (CF), Agrium Inc. (AGU) and The Mosaic Company (MOS).
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Here are highlights from Thursday’s Analyst Blog:
Starwood’s Extensive Latin America Plans
Starwood Hotels & Resorts Worldwide Inc. (HOT) plans to expand its operations in Latin America by 50% over the next five years. This will lead to the opening of seven hotels per year on an average in that region.
Starwood has been focusing on this fast growing region for quite some time. Starwood sees more construction opportunities in Latin America with around half a billion people and an abundance of natural resources.
The affluent middle class population in Latin America which grew by 50% over the last decade and greater footfall in the region caught the attention of Starwood. Apart from being a tourist hub, the region is also emerging as a business hub.
Starwood’s entry into Latin America dates back to 1963 when Sheraton Maria Isabel debuted in Mexico City. The property also marks the first international hotel company in Latin America. Leveraging its first-mover advantage, Starwood has become one of the most sought-after global brands in Latin America.
Starwood currently operates 72 hotels in 13 countries with a total of 15,600 rooms. Since 2007, its footprint in Latin America grew 36% making it the largest high-end hotel operator in the region. Presently, it has a pipeline of 19 hotels and intends to open six more under four different brands across four countries through 2013.
Among all other Latin American countries, Brazil and Colombia are expected to lead the growth trajectory. Brazil is set to witness a surge in demand driven by the resurgence of the middle class. A large number of hotels will be constructed in the country to cash in on the FIFA World Cup, which is scheduled in 2014 along with the Olympics in 2016.
Of late, Colombia has also undertaken steps to improve its economy and hotel infrastructure and thereby become an attractive destination for foreign investment and international hotel brands.
On the flip side, while Brazil and Colombia promise solid growth in the region, Argentina remains a laggard. In the first quarter of 2013, Starwood’s Latin America revenue per available room (RevPAR) was flat. Management expects the sluggish trend to persist in the region owing to deteriorating political situation, rising inflation and an over-valued currency in Argentina. However, we believe, these threats are short-lived.
Potash Raises Dividend 25%
Potash Corp. of Sakatchewan Inc. (POT) has announced a 25% hike in its quarterly cash dividend from 28 cents per share to 35 cents per share. The dividend will be paid on Aug 2, 2013, to shareholders of record on Jul 12, 2013. This represents the company’s fifth dividend hike since 2011.
Potash Corp. has increased its dividend based on its confidence to generate strong cash flow in the coming years and remains committed to escalating returns for its shareholders.
Potash Corp., which is among the prominent players in the fertilizer industry along with CF Industries Holdings, Inc. (CF), Agrium Inc. (AGU) and The Mosaic Company (MOS), released its first-quarter 2013 results in April. The company’s earnings of 63 cents per share in the first quarter exceeded the Zacks Consensus Estimate of 61 cents, reflecting a positive surprise of around 3.3%. The company posted a profit of $556 million in the reported quarter, up roughly 13% % from $491 million (56 cents a share) recorded a year ago.
Sales came in at $2,100 million in the quarter, up 20.3% from $1,746 million registered a year ago, and ahead of the Zacks Consensus Estimate of $1,923 million. The year-over-year increase was due to improved global potash demand and record first-quarter nitrogen contributions.
Potash Corp. expects earnings for the second quarter and full-year 2013 in the range of 70 cents to 85 cents per share and $2.75 to $3.25 per share, respectively.
While Potash Corp. may gain from a recovery in fertilizer demand in 2013, it contends with macroeconomic uncertainties and a challenging demand scenario in India. The company is also exposed to volatility in potash and phosphate pricing.
Potash Corp. currently retains a Zacks Rank #3 (Hold).
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