The CEO of Ryman Hospitality Properties, Inc. (REIT) (RHP) Added 20,000 Shares

Other REITs focused on operating hotels include Pebblebrook Hotel Trust (NYSE:PEB), Sotherly Hotels Inc (NASDAQ:SOHO), RLJ Lodging Trust (NYSE:RLJ), and LaSalle Hotel Properties (NYSE:LHO). RLJ has the highest yield of these four peers, at 3.6%. This places even it well below the dividend yield that Ryman offers, although its business appears to be performing better than Ryman’s in any case; revenue, at least, rose by 18% in its most recent quarter compared to the same period in the previous fiscal year. Pebblebrook, which has investments in the Doubletree hotel and convention center in Bethesda, Maryland among other assets, offers the lowest yield of this peer group at 2.6% though its revenue numbers have been looking even better than RLJ’s. Sotherly and LaSalle each pay annual yields of 3.3% at current prices and dividend levels. We would note that these two companies have been paying dividend yields for quite some time (the other three REITs we’ve discussed here only began or resumed their dividend payments more recently) and each of them reduced their quarterly payments to as low as 1 cent per share in 2009. This suggests that their dividends- and, presumably, those of these other companies as well- are vulnerable to negative economic shocks.

With Ryman’s business not doing so well recently, the bull case for the stock seems to depend on the high yield. We’ve mentioned that poor economic times could lead to a cut in the company’s dividend, and business conditions currently do not seem that strong in any case. As a result, we think that income investors looking for more speculative, high yield stocks to supplement their portfolios might be better served looking elsewhere.

Disclosure: I own no shares of any stocks mentioned in this article.