Why Is Booking Stock With Its High Cash Flow Yield Not on Your Watchlist?

Here is why we think Booking (BKNG) is worth a look.

• Cash Yield: Not many stocks offer free cash flow yield of 5.5%, but Booking stock does
• Fundamentals: 3-Year average revenue growth of 19.9% and operating margin of 30.8% show reasonable fundamentals
• Valuation: BKNG stock currently trading at 12% below 2Y high, 8.0% below 1M high, and at a PS lower than 3Y average.

Free Cash Flow Yield refers to free cash flow per share / stock price. Why it matters? If a company produces high amount of cash per share, it can be used to fuel additional revenue growth, or simply paid through dividends or buybacks to shareholders. For quick background, Booking provides global online travel and restaurant reservations, including accommodation booking, car rentals, and price comparison services across multiple platforms.

Single stock can be risky, but there is a huge value to a broader diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio (HQ) – HQ has outperformed its benchmark – a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 91% since its inception. Risk management is key – consider, what could long-term portfolio performance be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.

But do these numbers tell the full story? Read Buy or Sell BKNG Stock to see if Booking still has an edge that holds up under the hood.

That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure

The Point? The Market Can Notice, And Reward

The below statistics are from high FCF yield selection strategy between 12/31/2016 and 6/30/2025. The stats are calculated based on selections made monthly, and assuming that a stock once picked, can not be re-picked for next 180 days.

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Not over dependent on market crashes. During non-crash periods as well, this strategy has 12-month average return of nearly 18% with 70% win rate.

But Consider The Risk

That said, BKNG isn’t immune to big drops. It plunged nearly 100% in the Dot-Com Bubble and fell around 66% during the Global Financial Crisis. The 2018 correction and inflation shock knocked it down roughly 27% and 40%, respectively. Even the Covid selloff led to a 45% dip. The stock has strength, but when turbulence hits, steep declines still happen.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read BKNG Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

Picking winners on a consistent basis is not an easy task – especially given the volatility associated with a single stock. Instead, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.