TRAVEL + LEISURE CO (NYSE:TNL) – A Dividend Stock Worth Considering

TRAVEL + LEISURE CO (NYSE:TNL) was recently identified by our Best Dividend Stocks screener as a potential candidate for income-focused investors. The company combines a strong dividend profile with reasonable profitability and financial health, making it an interesting option for those seeking reliable payouts.

Key Dividend Strengths

• Attractive Yield: TNL currently offers a dividend yield of 4.35%, well above both the industry average (3.71%) and the S&P 500 average (2.42%).
• Sustainable Payout Ratio: The company pays out 34.69% of its earnings as dividends, indicating a sustainable distribution that leaves room for reinvestment and future growth.
• Reliable Track Record: TNL has been paying dividends for at least 10 years, demonstrating a commitment to returning capital to shareholders.
• Modest Growth: While the annual dividend growth rate of 2.47% is modest, it is supported by earnings growth, suggesting stability rather than aggressive expansion.

Profitability & Financial Health

• Solid Profitability: With a Return on Assets (ROA) of 6.18% and a Return on Invested Capital (ROIC) of 10.49%, TNL performs better than most peers in the Hotels, Restaurants & Leisure industry.
• Strong Liquidity: The company maintains a Current Ratio of 3.88 and a Quick Ratio of 2.85, indicating ample ability to meet short-term obligations.
• Reasonable Valuation: TNL trades at a P/E ratio of 8.77, significantly below both the industry and S&P 500 averages, suggesting the stock is priced attractively.

Considerations for Investors

While TNL’s debt levels are manageable, the Debt-to-Free Cash Flow ratio of 12.63 is on the higher side, meaning investors should monitor leverage trends. Additionally, revenue growth has been sluggish in recent years, though earnings are expected to improve in the coming years.

For a deeper dive into TNL’s fundamentals, review the full fundamental analysis report.

Our Best Dividend Stocks screener provides more high-quality dividend stock ideas and is updated regularly.

Disclaimer

This is not investment advice. The observations here are based on available data at the time of writing, and investors should conduct their own research before making decisions.