Earlier this week,
Host Hotels & Resorts Inc.
) - a real estate investment trust (REIT) - announced an 11%
sequential hike in its quarterly cash dividend rate. The company
will now pay a dividend of 10 cents per share compared with 9
cents paid in the prior quarter. The increased dividend will be
paid on Apr 15, 2013 to stockholders of record on Mar 28, 2013.
Host Hotels has a strong balance sheet, which provides the
financial flexibility to aim at high-yielding acquisitions, high
ROI (return on investments) capital projects, steady dividend
payouts and share buybacks.
In addition, the company is making concerted efforts towards
increasing shareholders' wealth and accordingly, it has recently
hiked its dividend payout for the 9th consecutive time. Notably,
a steady dividend payout facilitates the long-term strategy of
Host Hotels to provide attractive risk-adjusted returns to its
Host Hotels is a leading lodging REIT and operates luxury and
upper-upscale hotels across hard-to-replicate areas, which have
the potential for significant capital appreciation. Recently, it
completed a joint venture agreement with
Hyatt Hotels Corp.
) for a vacation ownership project. Also, it acquired 5 hotels in
Europe through a joint venture. Such strategic investments
strengthen its leading position in the market.
The company reported fourth quarter 2012 adjusted FFO (funds from
operations) per share of 40 cents, beating the Zacks Consensus
Estimate by 3 cents. This also exceeded the year-ago adjusted FFO
The results followed a strong performance of the company's
operating properties. With strong quarterly results, the company
is well poised to maintain its growth curves and simultaneously
benefit the shareholders with steadily rising dividends.
BRE PROPERTIES (BRE): Free Stock Analysis
HYATT HOTELS CP (H): Free Stock Analysis
HOST HOTEL&RSRT (HST): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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As a matter of fact, a number of REIT firms have increased their
dividend payouts recently. This includes
Simon Property Group Inc.
) that has raised its dividend by 4.5% sequentially while
BRE Properties Inc.
) declared a 2.6% sequential hike in its quarterly cash dividend.
Solid dividend payouts are arguably the biggest attraction for
REIT investors as the U.S. law requires these companies to
distribute 90% of their annual taxable income in the form of
dividends to shareholders.
Host Hotels currently carries a Zacks Rank #3 (Hold).
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.