MENU

2 ASX tourism shares high on my watchlist

Tourism may be one of the few industries exposed to a true tailwind.

There are a number of different elements all coming together to boost tourism numbers.

Baby boomers are retiring and want to explore the country, or the globe, in their golden years.

House prices are putting off the idea for younger people of owning a home, so travelling seems like a better use of money.

Australia is becoming more accessible for Americans, Europeans and Asians who want to visit the country.

That’s why I’m interested in the following two shares:

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Sydney Airport could be one of the most direct ways to access the growth of tourism numbers. Indeed, it benefits from incoming and outgoing tourist numbers.

Every month the business releases news of further passenger traffic growth. International passengers are the key driver of the growth, year to date at September 2018 international passengers were up by 4.8%.

The number of passengers from a number of countries continues to grow strongly. In September USA passengers were up by 8.3%, Indian passengers had grown by 13.6%, Japanese passengers were up by an impressive 15.7% and Malaysian passengers had gone up by 12.2%.

It’s currently trading at 33x FY19’s estimated earnings with a yield of 5.7%.

Crown Resorts Ltd (ASX: CWN)

Crown Resorts owns some of Australia’s leading casino resorts in Melbourne and Perth. Each location generates a large amount of earnings for Crown and it’s now constructing Crown Sydney, which would be another big earner for the company when it’s completed in a couple of years.

Some people want to stay at the best hotels they can, perhaps do a bit of gambling.

Crown just held its AGM and gave a trading update for July to 28 October. Australian resorts main floor gaming revenue (excluding VIP program play revenue) was down 0.6%, but Australian resorts non-gaming revenue was up 3.5%.

Pleasingly, VIP program play turnover at the Australian resorts increased by 13%.

In the short-term Crown offers a decent return with a partially franked dividend yield of 4.9% whilst Crown Sydney could be a big boost in the medium-term. It’s trading at 20x FY19’s estimated earnings.

Foolish takeaway

Both Crown and Sydney Airport are experiencing pleasing earnings growth. However, with rising interest rates I think Crown is better value based on the lower valuation and the hopefully-large increase in earnings in three years.

Another growth share I’d consider for my portfolio is this top share which is growing profit by double-digits every year.

The best dividend share on the ASX right now

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited and Sydney Airport Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.