Host Hotels & Resorts Inc. (HST - Free Report) , a real estate investment trust (REIT), has recently hiked its quarterly dividend for the third quarter of 2012 by 14.3% to 8 cents per share. The common stock dividend is payable in cash on October 15, 2012 to shareholders of record at the close of business on September 28.
The current dividend payout represents a two-fold increase from that paid in the year-ago quarter. To add a feather to its cap, the present dividend hike is the seventh such quarterly increase and marks a steady improvement in the operations of the company.
Based on the closing price of $17.21, the current dividend yield is fairly decent at approximately 1.9%. A steady dividend payout facilitates the long-term strategy of Host Hotels to provide attractive risk-adjusted returns to its stockholders. Investors looking for high dividend yields are increasingly favoring REITs like Host Hotels. 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, Host Hotels is the largest lodging REIT in the U.S. The company is also one of the largest owners of luxury and upper-upscale hotels, primarily operated under premium brands such as Marriott, Westin, Sheraton, Ritz-Carlton, Hyatt, W, Four Seasons, and St. Regi.
Over the years, the company has executed a focused and disciplined long-term strategic plan to acquire high quality lodging assets in hard-to-replicate areas which have the potential for significant capital appreciation.
Host Hotels maximizes the value of its existing portfolio through aggressive asset management, and works diligently with the managers of its hotels to reduce operating costs and increase revenues. The company conducts selective capital improvements and expansions designed to improve operations. In addition, the bulk of its properties operate under some of the most recognized brand names in the hospitality industry. This improves the profitability of the company and strengthens its leading position in the market.
We maintain our Neutral recommendation on Host Hotels, which has a Zacks #2 Rank that translates into a short-term Buy rating. We also have a Neutral recommendation and a Zacks #3 Rank (short-term Hold rating) for La Salle Hotel Properties (LHO - Free Report) , one of the competitors of Host Hotels.