More than 1,300 stockholders, after pausing silently in memory of the Marriott Corp.'s founder, yesterday gave J. W. Marriott Jr. a standing ovation after he announced that the company's stock will split five common shares for one on June 20.
It was the company's first annual meeting since the death last year of J. Willard Marriott, 84, who started the company with a nine-stool root-beer stand in Washington in 1927.
J. W. Marriott Jr., chairman and president of the international hotel and food-service company that is based in Bethesda, said the board approved the split "in recognition of the company's continued strong growth."
The company's stock has split four times previously, each time on a two-for-one basis. An original share of Marriott stock, bought for $10.25 when the company went public in 1953, would now be worth $4,800, Marriott said.
The latest stock split will be payable June 20 to shareholders of record on May 19. Marriott's stock closed at $165.50 yesterday, up $7.50 on a volume of 140,800 shares.
Analysts have attributed Marriott's strong growth pattern since the beginning of the year -- when it was trading at $107.88 -- to two factors. First, Marriott Hotels are expected to benefit from a strong domestic tourism market this year as Americans and foreigners choose to travel in this country, rather than risk terrorism abroad.
"People are anticipating great business this summer from people staying home," and stocks such as Marriott's have been big beneficiaries, said James M. Meyer, an analyst with Janney, Montgomery, Scott.
Secondly, Marriott's strong management, with a record of high growth and returns, has made it a favorite of institutional investors, analysts said.
"I think a five-to-one split was certainly called for," said Meyer. "It will make it a good retail stock because the average person in the street can recognize and relate to the name."
Individual investors traditionally stay away from many stocks that cost more than $100 a share.
The company's sales reached $4.2 billion in 1985, and net income climbed 20 percent to $167.4 million ($6.20 a share). First-quarter income results for 1986 were up 23 percent to $34.2 million ($1.25 a share) on revenue of $1 billion.
At yesterday's meeting at the company's flagship hotel at 14th Street and Pennsylvania Avenue NW, Marriott pointed to the growth of the company's lodging business -- last year the firm added more than 7,500 rooms and expects to add the same number again this year.
One of the company's newest properties is the Orlando World Center Resort, a 1,500-room facility near Walt Disney World and Epcot Center in Florida. Marriott denied reports that the company is involved in talks with Disney to develop hotel properties or manage hotels for Disney World.
"We're always looking at mergers and acquisitions," Marriott said. "But we're not now talking with Disney."
Marriott's two newest areas of expansion are Courtyard motels and life-care facilities. The company expects to add more than 4,000 Courtyard rooms by early next year, including hotels in Landover, Fairfax and the Reston/Herndon area, Marriott said yesterday.
Courtyard by Marriott is a new chain of suburban motels with nightly room rates of $35 to $65 that compete with such chains as Holiday Inns and Ramada Inns.
The company plans to open three life-care facilities in the next four years, beginning with a project in San Ramon, Calif., a company spokeswoman said. The communities would consist of condominium-style housing units, social and recreational facilities and an on-site health center.
Costs of one-bedroom units are expected to range from $60,000 to $90,000.