Stock Analysis on Net

Hilton Worldwide Holdings Inc. (NYSE:HLT)

This company has been moved to the archive! The financial data has not been updated since August 7, 2024.

Capital Asset Pricing Model (CAPM) 

Microsoft Excel

Capital asset pricing model (CAPM) indicates what should be the expected or required rate of return on risky assets like Hilton Worldwide Holdings Inc. common stock.


Rates of Return

Hilton Worldwide Holdings Inc., monthly rates of return

Microsoft Excel
Hilton Worldwide Holdings Inc. (HLT) Standard & Poor’s 500 (S&P 500)
t Date PriceHLT,t1 DividendHLT,t1 RHLT,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2019 $74.48 2,704.10
1. Feb 28, 2019 $83.10 $0.15 11.77% 2,784.49 2.97%
2. Mar 31, 2019 $83.11 0.01% 2,834.40 1.79%
3. Apr 30, 2019 $86.99 4.67% 2,945.83 3.93%
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2023 $167.52 $0.15 10.65% 4,567.80 8.92%
59. Dec 31, 2023 $182.09 8.70% 4,769.83 4.42%
Average (R): 1.99% 1.11%
Standard deviation: 9.31% 5.31%
Hilton Worldwide Holdings Inc. (HLT) Standard & Poor’s 500 (S&P 500)
t Date PriceHLT,t1 DividendHLT,t1 RHLT,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2019 $74.48 2,704.10
1. Feb 28, 2019 $83.10 $0.15 11.77% 2,784.49 2.97%
2. Mar 31, 2019 $83.11 0.01% 2,834.40 1.79%
3. Apr 30, 2019 $86.99 4.67% 2,945.83 3.93%
4. May 31, 2019 $89.44 $0.15 2.99% 2,752.06 -6.58%
5. Jun 30, 2019 $97.74 9.28% 2,941.76 6.89%
6. Jul 31, 2019 $96.55 -1.22% 2,980.38 1.31%
7. Aug 31, 2019 $92.37 $0.15 -4.17% 2,926.46 -1.81%
8. Sep 30, 2019 $93.11 0.80% 2,976.74 1.72%
9. Oct 31, 2019 $96.96 4.13% 3,037.56 2.04%
10. Nov 30, 2019 $105.00 $0.15 8.45% 3,140.98 3.40%
11. Dec 31, 2019 $110.91 5.63% 3,230.78 2.86%
12. Jan 31, 2020 $107.80 -2.80% 3,225.52 -0.16%
13. Feb 29, 2020 $97.20 $0.15 -9.69% 2,954.22 -8.41%
14. Mar 31, 2020 $68.24 -29.79% 2,584.59 -12.51%
15. Apr 30, 2020 $75.71 10.95% 2,912.43 12.68%
16. May 31, 2020 $79.31 4.75% 3,044.31 4.53%
17. Jun 30, 2020 $73.45 -7.39% 3,100.29 1.84%
18. Jul 31, 2020 $75.05 2.18% 3,271.12 5.51%
19. Aug 31, 2020 $90.36 20.40% 3,500.31 7.01%
20. Sep 30, 2020 $85.32 -5.58% 3,363.00 -3.92%
21. Oct 31, 2020 $87.81 2.92% 3,269.96 -2.77%
22. Nov 30, 2020 $103.63 18.02% 3,621.63 10.75%
23. Dec 31, 2020 $111.26 7.36% 3,756.07 3.71%
24. Jan 31, 2021 $101.39 -8.87% 3,714.24 -1.11%
25. Feb 28, 2021 $123.68 21.98% 3,811.15 2.61%
26. Mar 31, 2021 $120.92 -2.23% 3,972.89 4.24%
27. Apr 30, 2021 $128.70 6.43% 4,181.17 5.24%
28. May 31, 2021 $125.27 -2.67% 4,204.11 0.55%
29. Jun 30, 2021 $120.62 -3.71% 4,297.50 2.22%
30. Jul 31, 2021 $131.45 8.98% 4,395.26 2.27%
31. Aug 31, 2021 $124.86 -5.01% 4,522.68 2.90%
32. Sep 30, 2021 $132.11 5.81% 4,307.54 -4.76%
33. Oct 31, 2021 $143.95 8.96% 4,605.38 6.91%
34. Nov 30, 2021 $135.07 -6.17% 4,567.00 -0.83%
35. Dec 31, 2021 $155.99 15.49% 4,766.18 4.36%
36. Jan 31, 2022 $145.11 -6.97% 4,515.55 -5.26%
37. Feb 28, 2022 $148.86 2.58% 4,373.94 -3.14%
38. Mar 31, 2022 $151.74 1.93% 4,530.41 3.58%
39. Apr 30, 2022 $155.29 2.34% 4,131.93 -8.80%
40. May 31, 2022 $140.86 $0.15 -9.20% 4,132.15 0.01%
41. Jun 30, 2022 $111.44 -20.89% 3,785.38 -8.39%
42. Jul 31, 2022 $128.07 14.92% 4,130.29 9.11%
43. Aug 31, 2022 $127.36 $0.15 -0.44% 3,955.00 -4.24%
44. Sep 30, 2022 $120.62 -5.29% 3,585.62 -9.34%
45. Oct 31, 2022 $135.26 12.14% 3,871.98 7.99%
46. Nov 30, 2022 $142.62 $0.15 5.55% 4,080.11 5.38%
47. Dec 31, 2022 $126.36 -11.40% 3,839.50 -5.90%
48. Jan 31, 2023 $145.09 14.82% 4,076.60 6.18%
49. Feb 28, 2023 $144.51 $0.15 -0.30% 3,970.15 -2.61%
50. Mar 31, 2023 $140.87 -2.52% 4,109.31 3.51%
51. Apr 30, 2023 $144.02 2.24% 4,169.48 1.46%
52. May 31, 2023 $136.12 $0.15 -5.38% 4,179.83 0.25%
53. Jun 30, 2023 $145.55 6.93% 4,376.86 4.71%
54. Jul 31, 2023 $155.49 6.83% 4,588.96 4.85%
55. Aug 31, 2023 $148.65 $0.15 -4.30% 4,507.66 -1.77%
56. Sep 30, 2023 $150.18 1.03% 4,288.05 -4.87%
57. Oct 31, 2023 $151.53 0.90% 4,193.80 -2.20%
58. Nov 30, 2023 $167.52 $0.15 10.65% 4,567.80 8.92%
59. Dec 31, 2023 $182.09 8.70% 4,769.83 4.42%
Average (R): 1.99% 1.11%
Standard deviation: 9.31% 5.31%

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1 Data in US$ per share of common stock, adjusted for splits and stock dividends.

2 Rate of return on common stock of HLT during period t

3 Rate of return on S&P 500 (the market portfolio proxy) during period t


Variance and Covariance

Hilton Worldwide Holdings Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RHLT,t RS&P 500,t (RHLT,tRHLT)2 (RS&P 500,tRS&P 500)2 (RHLT,tRHLT)×(RS&P 500,tRS&P 500)
1. Feb 28, 2019 11.77% 2.97% 95.70 3.49 18.27
2. Mar 31, 2019 0.01% 1.79% 3.92 0.47 -1.36
3. Apr 30, 2019 4.67% 3.93% 7.16 7.98 7.56
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2023 10.65% 8.92% 74.98 61.03 67.65
59. Dec 31, 2023 8.70% 4.42% 44.96 11.00 22.24
Total (Σ): 5,022.46 1,634.30 2,071.12
t Date RHLT,t RS&P 500,t (RHLT,tRHLT)2 (RS&P 500,tRS&P 500)2 (RHLT,tRHLT)×(RS&P 500,tRS&P 500)
1. Feb 28, 2019 11.77% 2.97% 95.70 3.49 18.27
2. Mar 31, 2019 0.01% 1.79% 3.92 0.47 -1.36
3. Apr 30, 2019 4.67% 3.93% 7.16 7.98 7.56
4. May 31, 2019 2.99% -6.58% 0.99 59.04 -7.66
5. Jun 30, 2019 9.28% 6.89% 53.11 33.49 42.18
6. Jul 31, 2019 -1.22% 1.31% 10.30 0.04 -0.66
7. Aug 31, 2019 -4.17% -1.81% 38.02 8.50 17.97
8. Sep 30, 2019 0.80% 1.72% 1.42 0.37 -0.73
9. Oct 31, 2019 4.13% 2.04% 4.59 0.88 2.01
10. Nov 30, 2019 8.45% 3.40% 41.66 5.28 14.84
11. Dec 31, 2019 5.63% 2.86% 13.22 3.07 6.38
12. Jan 31, 2020 -2.80% -0.16% 23.00 1.61 6.08
13. Feb 29, 2020 -9.69% -8.41% 136.56 90.57 111.21
14. Mar 31, 2020 -29.79% -12.51% 1,010.37 185.44 432.86
15. Apr 30, 2020 10.95% 12.68% 80.18 134.06 103.68
16. May 31, 2020 4.75% 4.53% 7.63 11.71 9.46
17. Jun 30, 2020 -7.39% 1.84% 88.00 0.54 -6.88
18. Jul 31, 2020 2.18% 5.51% 0.03 19.40 0.82
19. Aug 31, 2020 20.40% 7.01% 338.84 34.82 108.62
20. Sep 30, 2020 -5.58% -3.92% 57.30 25.29 38.07
21. Oct 31, 2020 2.92% -2.77% 0.86 15.00 -3.59
22. Nov 30, 2020 18.02% 10.75% 256.77 93.10 154.61
23. Dec 31, 2020 7.36% 3.71% 28.84 6.79 14.00
24. Jan 31, 2021 -8.87% -1.11% 118.01 4.93 24.11
25. Feb 28, 2021 21.98% 2.61% 399.69 2.26 30.05
26. Mar 31, 2021 -2.23% 4.24% 17.84 9.85 -13.25
27. Apr 30, 2021 6.43% 5.24% 19.73 17.11 18.37
28. May 31, 2021 -2.67% 0.55% 21.69 0.31 2.59
29. Jun 30, 2021 -3.71% 2.22% 32.54 1.24 -6.36
30. Jul 31, 2021 8.98% 2.27% 48.81 1.37 8.17
31. Aug 31, 2021 -5.01% 2.90% 49.08 3.22 -12.56
32. Sep 30, 2021 5.81% -4.76% 14.55 34.37 -22.36
33. Oct 31, 2021 8.96% 6.91% 48.58 33.74 40.49
34. Nov 30, 2021 -6.17% -0.83% 66.60 3.76 15.83
35. Dec 31, 2021 15.49% 4.36% 182.15 10.60 43.94
36. Jan 31, 2022 -6.97% -5.26% 80.41 40.51 57.07
37. Feb 28, 2022 2.58% -3.14% 0.35 17.99 -2.51
38. Mar 31, 2022 1.93% 3.58% 0.00 6.11 -0.14
39. Apr 30, 2022 2.34% -8.80% 0.12 98.04 -3.44
40. May 31, 2022 -9.20% 0.01% 125.17 1.21 12.31
41. Jun 30, 2022 -20.89% -8.39% 523.41 90.21 217.29
42. Jul 31, 2022 14.92% 9.11% 167.20 64.09 103.52
43. Aug 31, 2022 -0.44% -4.24% 5.90 28.62 13.00
44. Sep 30, 2022 -5.29% -9.34% 53.06 109.11 76.09
45. Oct 31, 2022 12.14% 7.99% 102.93 47.34 69.80
46. Nov 30, 2022 5.55% 5.38% 12.67 18.23 15.20
47. Dec 31, 2022 -11.40% -5.90% 179.37 49.04 93.79
48. Jan 31, 2023 14.82% 6.18% 164.63 25.70 65.04
49. Feb 28, 2023 -0.30% -2.61% 5.24 13.82 8.51
50. Mar 31, 2023 -2.52% 3.51% 20.35 5.76 -10.82
51. Apr 30, 2023 2.24% 1.46% 0.06 0.13 0.09
52. May 31, 2023 -5.38% 0.25% 54.37 0.74 6.32
53. Jun 30, 2023 6.93% 4.71% 24.36 13.02 17.81
54. Jul 31, 2023 6.83% 4.85% 23.40 13.99 18.09
55. Aug 31, 2023 -4.30% -1.77% 39.62 8.28 18.11
56. Sep 30, 2023 1.03% -4.87% 0.93 35.73 5.76
57. Oct 31, 2023 0.90% -2.20% 1.19 10.92 3.61
58. Nov 30, 2023 10.65% 8.92% 74.98 61.03 67.65
59. Dec 31, 2023 8.70% 4.42% 44.96 11.00 22.24
Total (Σ): 5,022.46 1,634.30 2,071.12

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VarianceHLT = Σ(RHLT,tRHLT)2 ÷ (59 – 1)
= 5,022.46 ÷ (59 – 1)
= 86.59

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (59 – 1)
= 1,634.30 ÷ (59 – 1)
= 28.18

CovarianceHLT, S&P 500 = Σ(RHLT,tRHLT)×(RS&P 500,tRS&P 500) ÷ (59 – 1)
= 2,071.12 ÷ (59 – 1)
= 35.71


Systematic Risk (β) Estimation

Microsoft Excel
VarianceHLT 86.59
VarianceS&P 500 28.18
CovarianceHLT, S&P 500 35.71
Correlation coefficientHLT, S&P 5001 0.72
βHLT2 1.27
αHLT3 0.59%

Calculations

1 Correlation coefficientHLT, S&P 500
= CovarianceHLT, S&P 500 ÷ (Standard deviationHLT × Standard deviationS&P 500)
= 35.71 ÷ (9.31% × 5.31%)
= 0.72

2 βHLT
= CovarianceHLT, S&P 500 ÷ VarianceS&P 500
= 35.71 ÷ 28.18
= 1.27

3 αHLT
= AverageHLT – βHLT × AverageS&P 500
= 1.99%1.27 × 1.11%
= 0.59%


Expected Rate of Return

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Assumptions
Rate of return on LT Treasury Composite1 RF 4.67%
Expected rate of return on market portfolio2 E(RM) 13.79%
Systematic risk (β) of Hilton Worldwide Holdings Inc. common stock βHLT 1.27
 
Expected rate of return on Hilton Worldwide Holdings Inc. common stock3 E(RHLT) 16.22%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 E(RHLT) = RF + βHLT [E(RM) – RF]
= 4.67% + 1.27 [13.79%4.67%]
= 16.22%