5 TSX travel & tourism stocks to watch ahead of holidays

Highlights

• Air Canada’s operating income in Q3 2022 was C$ 644 million.
• Gamehost’s EBITDA was reported at C$ 17.6 million in Q3 2022.
• Clarke’s posted Q3 2022 net income of C$ 3.9 million.

During the pandemic, the travel and tourism industry was adversely impacted. After the lockdowns were imposed and the borders were shut, there was a steep downfall and travel stocks plunged. However, with vaccinations and the relaxation of Covid norms, people started their regular travel routines.

There were certain announcements made by governments across the world that encouraged people to resume travel. It impacted the stocks as well. The other factor is the economy which plays a crucial role in travel stocks. While the economy is thriving, the impact can be seen on travel stocks too.

With travel relaxations, the aviation industry has witnessed movement. Although it may take time to return to the normal phase, investors are hopeful for the return.

Many investors may go for these stocks without having an overall view. Whenever you select stocks, always consider the company valuations along with the past and present financial performance. This will help you to keep a grip on your portfolio even in uncertain situations.

Now, let us look at five travel stocks with their recent financial highlights:

1. Air Canada (TSX:AC)

Air Canada is a Canadian airline that serves approximately 50 million passengers along with its regional partners. It shares similarities with the Gulf carriers and flies the US nationals with a layover in Canada.

In Q3 2022, Air Canada’s operating income rose to C$ 644 million from a loss of C$ 364 million in the same quarter the previous year. The EBITDA also increased to C$ 1,057 million from C$ 36 million for the same comparable period. The operating revenues grew to C$ 5,322 million from C$ 2,103 million. The company’s net loss was reduced to C$ 508 million compared to C$ 640 million in the reported quarter.

2. Chorus Aviation Inc. (TSX:CHR)

Chorus Aviation Inc. is a Canada-based company provides aircraft leasing solutions along with contract flying, repair and overhaul. The company operates in two segments-Regional Aircraft Leasing and Regional Aviation Services.

In Q3 2022, Chorus Aviation’s revenue was reported at C$ 421.32 million compared to C$ 274.39 million in Q3 2021. Meanwhile, the operating income rose to C$ 65.53 million from C$ 31.89 million for the same comparable period. The company’s net income grew to C$ 23.56 million from a net loss of 14.08 million. The adjusted EBITDA jumped to C$ 123.35 million from C$ 78.08 million. The company reported a P/E (price-to-earnings) ratio of 302.

On May 3, 2022, Chorus Aviation Inc. acquired Falko Regional Aircraft Limited.

3. Gamehost Inc. (TSX:GH)

Gamehost Inc. operates in gaming properties and hospitality in Alberta, Canada. The company's gaming segment offers table games, slot, lottery, VLT. The Hotel segment caters to mid-range clients. Lastly, the Food and Beverage segment operates within the hotels and casinos complementing other segments.

In Q3 2022, Gamehost’s operating revenue was noted at C$ 51 million compared to C$ 19.7 million in the year-ago quarter. The gross profit increased to C$ 17.6 million from C$ 4.8 million for the same comparable period. The profit from operating activities went up to C$ 14 million from C$ 6.3 million.

The company’s EBITDA jumped to C$ 17.6 million from C$ 9.2 million compared to the year-ago quarter. Gamehost pays a monthly dividend of C$ 0.03 per share and reported a dividend yield of 4.749 per cent. The EPS is C$ 0.45 along with the P/E ratio of 16.9.

4. Clarke Inc. (TSX:CKI)

Clarke Inc. is a Canada-based company that operates in Hospitality and Investment. The company’s Hospitality segment deals in hotel operations, ownership and the provision of hotel management services which generates the maximum revenue.

Clarke’s net income in Q3 2022 grew to C$ 3.9 million compared to C$ 3.5 million in Q3 2021. The hotel revenue rose to C$ 17.2 million from C$ 11 million for the same comparable period. The total assets of the company jumped to C$ 389.6 million from C$ 382.4 million. Meanwhile, the total liabilities grew to C$ 194.7 million from C$ 181 million for the reported quarter.

Clarke Inc.’s basic EPS in two different periods:

5. American Hotel Income Properties REIT LP (TSX: HOT.UN)

American Hotel Income Properties REIT LP makes investment in real estate properties. Primarily, the company owns Premium Branded hotels having franchise agreements with international hotel brands including IHG, Hilton and Marriott. The revenue generation sources of the company include beverages, rooms, food, and other revenue.

In Q3 2022, American Hotel’s revenue jumped to US$ 76.17 million from US$ 68.41 million in the same quarter of the previous year. The cash flow provided by operating activities was posted at US$ 14.16 million compared to US$ 9.64 million for the reported quarter.

As on September 30, 2022, the company’s total liabilities shrank and were reported at US$ 759.09 million versus US$ 775.88 million on December 31, 2021. American Hotel distributes a monthly dividend of US$ 0.015. Further, the company reported a dividend yield of 8.858 per cent.

Bottom Line

With COVID-19 ebbing gradually, the travel and tourism industry is being optimistic. But as a long-term investor, do not let your portfolio get affected by short-term views. Instead, you can diversify your portfolio and minimize the risks. Regular repositioning of the portfolio is a crucial step and must be on the check list of every investor.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.