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Analyst Blog

Host Hotels & Resorts, Inc (HST - Analyst Report),a real estate investment trust (REIT), recently announced a 17.0% hike in its quarterly dividend to 7 cents per share, thus marking the sixth consecutive dividend increase by the company. The increased dividend will be paid on July 16, 2012 to shareholders of record as of June 29, 2012.

Host Hotels possesses a strong balance sheet, which provides the financial flexibility to pursue acquisitions, high ROI (return on investments) capital projects, dividend payouts, and share buybacks.

At the end of the first quarter of 2012, Host Hotels had over $1,312 million in cash and cash equivalents and about $859 million available under its credit facility. Total debt of the company at the end of first quarter 2012 was $6.1 billion.

During the first quarter of 2012, Host Hotels reported FFO (funds from operations) of $101 million or 14 cents per share compared with $77 million or 11 cents per share in the year-earlier quarter.  Funds from operations, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.

Host Hotels is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. Over the years, the company has executed a focused and disciplined long-term strategic plan to acquire high-quality lodging assets, which have the potential for significant capital appreciation.

Host Hotels currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We maintain our long-term Neutral recommendation on the stock. One of its competitors, La Salle Hotel properties (LHO) also holds a Zacks #2 Rank.

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