Bethesda-based real estate investment trust (REIT),
DiamondRock Hospitality Company
) declared a 20.6% hike in its quarterly cash dividend rate. The
company will now pay a dividend of 10.25 cents per share for
first-quarter 2014, up from 8.50 cents paid in the prior quarter.
The increased dividend will be paid on Apr 10, 2014 to
shareholders of record on Mar 31.
The dividend hike at DiamondRock reflects its solid operating
results in 2013 and an enhanced financial position. The company
has experienced an average surprise of 11.13% in the last 4
months. As of Dec 31, 2013, the company had cash and cash
equivalents worth $144.6 million, rising substantially from $9.6
million as of Dec 31, 2012. Hence, we believe DiamondRock has
sufficient cash to pay dividends.
A steady dividend payout is in line with the long-term
strategy of this lodging real estate investment trust (REIT) to
provide attractive risk-adjusted returns to its stockholders.
Based on the current dividend rate, the 2014 annual dividend rate
comes to 41 cents per share, 7 cents above the 2013 annual
dividend of 34 cents per share. This new dividend rate results in
an annualized yield of about 3.4% based on DiamondRock's closing
price of $12.19 on Mar 25.
Apart from DiamondRock, a number of other REITs have increased
their dividend payouts last week. This includes
Kite Realty Group Trust
), which declared an 8.3% sequential rise in its first-quarter
2014 dividend rate to 6.5 cents per share. The other is
) that announced a 10.6% sequential hike in its quarterly
dividend rate to 26 cents per share.
Solid dividend payouts are arguably the biggest attraction for
REIT investors since the U.S. law requires these companies to
distribute 90% of their annual taxable income in the form of
dividends to shareholders.
DiamondRock owns, acquires, and invests in upscale hotels
under the Hilton, Marriott and Westin brands across the U.S.
Currently, the company owns 26 premium hotels with over 11,000
DiamondRock currently carries a Zacks Rank #3 (Hold). A
better-ranked REIT is
Sotherly Hotels Inc.
) having a Zacks Rank #1 (Strong Buy).
DIAMONDROCK HOS (DRH): Free Stock Analysis
KITE REALTY GRP (KRG): Free Stock Analysis
SOTHERLY HOTELS (SOHO): Get Free Report
UDR INC (UDR): Free Stock Analysis Report
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