Loews Hotels & Resorts, a wholly owned subsidiary of Loews Corporation (L), has announced plans to purchase InterContinental Chicago O'Hare Hotel. Scheduled to close in late July, this acquisition will strengthen Loews’ Midwest presence apart from ramping up its hotel business.
InterContinental Chicago O'Hare Hotel comprises 556 rooms, three restaurants and bars, over 53,000 square feet of meeting and event space, and an art gallery. With this latest buy, the hotel tally reaches two in Chicago and three in the Midwest area.
Loews had earlier announced intentions of reaching its hotel count to over 30 and increasing its net income three-fold by 2015. Thus, adding new hotels to its portfolio is in accordance with the company’s strategy. Earlier this month, Loews signed an agreement to purchase the Graves 601 Hotel in Minneapolis.
With considerable capital at disposal, management will seek opportunities to develop and acquire properties in Boston, Chicago, San Francisco, Washington, D.C., New York, Dallas, Toronto and Seattle to add assets to its portfolio, thereby aiding it to cater to a larger customer base. Loews presently owns and/or operates 21 hotels and resorts in the U.S. and Canada.
Loews’ Hotels segment revenues in the last reported quarter highlighted a 12% year-over-year improvement to $105 million. The segment contributed $3 million to Loews’ consolidated earnings while we expect the number to improve as the hotel business ramps up.
Loews currently carries a Zacks rank #4 (Sell). Better performing multi-line insurers worth considering include Radian Group Inc. (RDN), CNO Financial Group, Inc. (CNO) and Meadowbrook Insurance Group Inc. (MIG). While Radian Group sports a Zacks Rank #1 (Strong Buy), CNO Financial and Meadowbrook Insurance carry a Zacks Rank #2 (Buy).