Risks to Consider: The hotel sector is very competitive, and demand for rooms could cool if the economy falters again. LaSalle has taken on debt on which interest rates could go up, which could cut down on its profits even though it uses hedges to ward off this risk.
Action to Take –> REITs are required to pay as much as 90% of their income to shareholders, so there is a good possibility of higher dividend payments for LaSalle Hotel Properties (NYSE:LHO)’s owners. There is also some upside on the stock as the REIT continues to grow. Because construction activity was down during the recession, fewer hotel rooms coming online as demand is going up, so the REIT is anticipating a favorable environment for the near term.
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The article This REIT Just Raised Its Dividend 40% — Is More To Come? originally appeared on StreetAuthority and is written by Poonkulali Thangavelu.
Poonkulali Thangavelu does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.