What is interesting is that the cycle of equities and
commodities hotel stocks are now in sync
and gold and the equity markets are moving together traders need to
take a look. When the relationship moves back inversely, then
the move to safety is on. The United States is the undisputed champion
when it comes to entrepreneurial culture and investment in technology.
This position allows the U.S. to attract and retain the top talent
from across the globe to further cutting edge research, development,
and innovation. The Hospitality Sector is another great area to invest
in especially when people are staying there and spending money. Here
are some hospitality sector stocks that are worth taking a look at.
Chatham Lodging (CLDT)
This company has, since its IPO in 2010, developed a portfolio of
hotels in the upscale, extended-stay market. About three-quarters of
its properties are in the Northeast and along the California coast.
Its public offering in 2010 gave the company the resources to complete
renovations when occupancy was still low, thereby getting more bang
for its buck. Recent results have been strong, including above-average
per room revenue growth. The stock trades well below its 2010 IPO
price and at an attractive long-term valuation.
Diamondrock Hospitality (DRH)
This company has a strategy focused primarily on premium full-service
hotels, with 26 hotels located in large cities and destination
resorts.
First quarter results were solid, with strong earnings, bookings, and
market-share gains. The New York and Boston markets were particularly
robust. And the balance sheet is solid, with no corporate debt, and so
the dividend looks safe. At today's levels, the stock is just below
its 2005 IPO price.
FelCor Lodging (FCH)
This company owns hotels in 22 states and Canada that are mostly
upscale properties in urban and resort markets. The company is still a
turnaround-in-progress. It is selling properties in order to pay down
debt and renovate or redevelop other properties. While there is
definitely risk here, recent insider buying is a good sign.
Host Hotels & Resorts (HST)
One of the older hotel-resort operators, having begun operations as
part of Marriott in 1927. Results have improved, including a strong
first quarter, but the company is still selling assets, particularly
airport properties. It is also restructuring the balance sheet with
debt and equity offerings.
In addition to its US properties, Host has hotels and joint venture
interests abroad that should provide good diversification over the
long term.
MHI Hospitality (MDH)
Strategic Hotel & Resorts (BEE)
This company has the most upscale focus of the hoteliers discussed
here. Its 17 hotels and resorts, which include brands such as
Fairmont, Four Seasons, and Ritz Carlton, are found in high-end
markets, mostly in North America but also select international
locations.
This premier positioning worked against the company during the
recession, as customers became more cost-conscious.
As with many in the industry, management was forced to eliminate
dividends, both common and preferred. The preferred dividend will be
reinstated soon, but common dividends are less certain. Management is
making solid progress in shoring up the balance sheet, and the stock
should do well as travelers begin to spend more.
Sunstone Hotel Investors (SHO)
An operator of primarily upper-upscale properties in larger urban
markets. The recession pushed Sunstone into a consolidation mode that
eventually led to its deeding eight properties back to its lenders and
the elimination of the common dividend. While leverage remains a bit
high, management is well on track to getting the balance sheet on
sounder footing. With its improved financials, Sunstone was recently
able to acquire the Wyndham Chicago hotel from Blackstone Group. As
part of the deal, Blackstone ends up as a five percent shareholder of
Sunstone. |
