Host Hotels Hikes Dividend - Analyst Blog
12 Março 2012 - 3:15PM
Zacks
Host Hotels & Resorts, Inc. (HST), the
largest lodging real estate investment trust (REIT), has recently
increased its dividend payout by 20% to a quarterly payment of 6
cents per share or 24 cents on an annualized basis. The first
quarter 2012 dividend is payable in cash on April 16, 2012 to
shareholders of record as on March 30, 2012.
The current dividend hike is the fifth consecutive quarterly
dividend increase for the company. A steady dividend payout
facilitates the long-term strategy of Host Hotels to provide
attractive risk-adjusted returns to its stockholders.
Investors looking for high dividend yields are increasingly
favoring REITs like Host Hotels. Solid dividend payouts are
arguably the biggest enticement for REIT investors as the U.S. law
requires REITs to distribute 90% of their annual taxable income in
the form of dividends to shareholders.
Based in Bethesda, Maryland, Host Hotels is one of the largest
owners of luxury and upper-upscale hotels, primarily operated under
premium brand, such as Marriott, Westin, Sheraton, Ritz-Carlton,
Hyatt, W, Four Seasons, and St. Regi.
The company maximizes the value of its existing portfolio
through aggressive asset management, and works diligently with the
managers of its hotels to reduce operating costs and increase
revenues, and conducts selective capital improvements and
expansions designed to improve operations.
Host Hotels also has a strong balance sheet, which provides the
financial flexibility to aim high-yielding acquisitions, high ROI
(return on investments) capital projects, steady dividend payouts,
and share buybacks. The company anticipates the gradual revival of
the overall economy to boost its operating results in 2012, with
comparable hotel RevPAR (revenue per available room) expected to
increase in the range of 4.0% to 6.0% for the full year.
However, majority of Host Hotels’ properties are concentrated in
the luxury and upper-upscale segments, which had been the weakest
performing segments during the economic downturn. If this trend
reoccurs in the future, the bottom line of the company is likely to
be affected, reducing its operating margins.
We maintain our Neutral recommendation on Host Hotels, which
presently has a Zacks #3 Rank that translates into a short-term
Hold rating. We also have a Neutral recommendation and a Zacks #3
Rank for FelCor Lodging Trust Inc (FCH), one of
the competitors of Host Hotels.
FELCOR LODGING (FCH): Free Stock Analysis Report
HOST HOTEL&RSRT (HST): Free Stock Analysis Report
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