Maybe my 14 was to high. It is hard to say what it should be. From this chart, multiples held at around 12 for several years before falling. 12 times 1.5 is 18. We are still a bargain at 8. I think I always in my mind used 14 because of the buyout potential.
Based upon reading the earnings reports of Host Marriott, I think the earnings will be ok, but definitely showing a slowing trend. But the stock is oversold and they will announce more details on the buyback and possibly selling other assets to raise cash and buy back more stock at current prices. As for the dividend, you might see a reduction to bring it more in line with industry averages. Host dividend is in the 6 to 7 percent range, but that would just mean more cash would be available for operations and stock buybacks.
I believe they are required to payout at least 90% of earnings as a dividend in order to maintain their REIT Tax status. So...they are prevented from cutting the dividend simply to bring it in line with industry standard.
It the forward guidance that is important in this marketplace now. I think earnings might be a bit lower because of the economy - which the analyst full understand; but if BEE can give a positive spin on things. The stock price of BEE - well it kind of in the basement! Anything to make it go up; love to see a buyout of BEE, increasing earnings, buyback stock "extremely" good value, etc... could not hurt!
I cannot believe it fell so much from where I first purchase it in the $17s! Boy, that was a stupid buy! Another was WFMI in the $32s!