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RLJ Lodging Trust (
- Snapshot Report
, a real estate investment trust (REIT), has recently declared a quarterly dividend of 16.5 cents per share for the third quarter of 2012. The dividend is payable in cash on October 15, 2012, to shareholders of record as on September 28.
The proposed dividend represents a 10.0% year over year increase to that paid in the year-ago quarter. If the current dividend level is maintained for the remainder of the year, the annualized dividend payout of the company would be $0.66 per share.
Based on the closing price of $19.26, the current dividend yield is fairly decent, at approximately 3.4%. A steady dividend payout facilitates the long-term strategy of RLJ Lodging Trust to provide attractive risk-adjusted returns to its stockholders.
Investors looking for high dividend yields are increasingly favoring REITs like RLJ Lodging Trust. Solid dividend payouts are arguably the biggest enticement for REIT investors as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders.
Based in Bethesda, Maryland, RLJ Lodging Trust operates premium upscale full-service hotels across the U.S. Most of the properties of the company are located in major urban and dense suburban markets that have significant barriers to entry. The property portfolio of the company includes 144 hotels in 20 states and the District of Columbia, with over 21,300 rooms.
The company strategically invests in premium-branded, focused-service and compact full-service hotels. Focused-service hotels generally generate most of their revenue from room rentals, have limited food and beverage outlets, and require fewer employees than traditional full-service hotels. Consequently, these hotels have the potential to generate attractive returns relative to other conventional hotels with a relatively more efficient operating model and less volatile cash flows.
We have an Outperform recommendation on RLJ Lodging Trust for the long term, which currently has a Zacks #2 Rank that translates into a short-term Buy rating. However, we have a long-term Neutral recommendation and a Zacks #2 Rank for Host Hotels & Resorts Inc. ( HST - Analyst Report ) , one of the competitors of RLJ Lodging Trust.
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