Host Hotels Hikes Dividend - Analyst Blog
September 20 2011 - 8:15AM
Zacks
Host Hotels & Resorts,
Inc. (HST), a real estate investment trust (REIT),
recently hiked its quarterly cash dividend by 1 cent to 4 cents per
share. This translates into a 33.3% increase over the prior
dividend, taking the annual dividend yield as of September 19,
2011, to 1.37%. The new dividend will be paid on October 17, 2011,
to stockholders of record as of September 30, 2011.
As operations continue to improve,
Host Hotels expects to increase the dividend modestly over the next
quarter, resulting in a full-year 2011 dividend of about 14-15
cents per share.
Host Hotels has a strong balance
sheet that provides the required financial flexibility to aim at
high-yielding acquisitions, high ROI (return on investments)
capital projects, dividend payouts, and share buybacks. This augurs
well for the company’s long-term growth. At the end of second
quarter 2011, Host hotels' cash balance stood at $630 million. We
believe the company has enough cash and cash equivalents to provide
optimum shareholder value.
During the second quarter, the
company’s funds from operations (FFO) stood at $210 million or 30
cents per share compared with $151 million or 23 cents per share in
the year-earlier quarter. FFO, a widely used metric to gauge the
performance of REITs, is obtained after adding depreciation and
amortization and other non-cash expenses to net income.
Host Hotels is the largest lodging
REIT with high-quality lodging assets in geographically diverse
locations. Over the years, the company has executed a focused and
disciplined long-term strategic plan to acquire high-quality
lodging assets in hard-to-replicate areas that have the potential
for significant capital appreciation.
Host Hotels currently retains a
Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. We
are also maintaining our long-term “Neutral” recommendation on the
stock. One of its competitors, La Salle Hotel
Properties (LHO), also holds a Zacks #3 Rank.
HOST HOTEL&RSRT (HST): Free Stock Analysis Report
LASALLE HTL PRP (LHO): Free Stock Analysis Report
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