LaSalle Shares, Dividend Rise Amid Acquisition Spree
LaSalle Hotel Properties ' ( LHO ) shares and dividend are on the upswing as the owner of upscale hotels goes on an acquisition spree.
Though the stock has gone mostly sideways in recent years, it's up 15% so far in 2013, a bit shy of the S&P 500's 19% gain.
Meanwhile, the quarterly dividend has soared over the past three years after it was slashed to just a penny a share during the financial crisis of 2008-09.
The latest increase was announced in July, a 40% jump to 28 cents a share. The annualized dividend now totals $1.12 a share, which yields about 4% at the current share price. That's well above the S&P average of 2.5%.
"Our strong results year to date have been encouraging while our outlook for the balance of the year is solid," President and CEO Michael Barnello said when the dividend was most recently raised.
LaSalle is a real estate investment trust, or REIT, that owns some 40 luxury hotels across the country. REITs typically offer investors high yields in return for favorable tax treatment.
LaSalle reports Q3 results after the market closes on Wednesday. Profit for the period is expected to hold steady at 68 cents a share on an 8% increase in revenue, to $256.6 million.
After sharp declines during the financial crisis, annual profit has bounced back and is expected to rise 7% this year and 15% in 2014. The company has recently purchased six upscale hotels in Key West, Fla., and San Francisco, where demand is strong.
"We remain upbeat about LaSalle's strategic moves that are aimed at strengthening its portfolio base of luxury and upper-upscale hotels in high barrier-to-entry markets throughout the U.S," Zacks Equity Research said in a research note Sept. 3. "The strong portfolio positions it well to ride on the growth trajectory going forward."
The stock is at the upper end of a buy range following a rebound off its 50-day average.