U.S. Markets closed

Dividend Hike at Pebblebrook

Zacks Equity Research

Pebblebrook Hotel Trust (PEB) – a real estate investment trust (:REIT) – recently announced a 33% hike in its quarterly cash dividend rate. The company will now pay a dividend of 16 cents per share for first-quarter 2013, up 4 cents from the prior-quarter dividend. The increased dividend will be paid on Apr 15, 2013 to stockholders of record on Apr 1.

Pebblebrook is focused on managing its capital efficiently. As of Dec 31, 2012, Pebblebrook had $97.9 million of consolidated cash, cash equivalents and restricted cash. We believe that the company has adequate cash to provide optimum shareholder value.

Pebblebrook Hotel Trust is an internally managed hotel investment company organized to acquire and invest in hotel properties located primarily in large cities in the United States with an emphasis on the major coastal markets. Currently, the company owns 26 hotels, including 20 wholly owned hotels with a total of 4,960 guest rooms and a 49% joint venture interest in 6 hotels with a total of 1,733 guest rooms.

Pebblebrook is expected to continue to benefit from solid underlying fundamentals with demand for hotel rooms climbing up and supply remaining relatively restricted. Increase in transient business and leisure travel, as well as decent growth in inbound international travel have held up travel demand despite the uncertain global economic environment.

Pebblebrook’s RevPAR (Revenue per available room) continues to benefit from strategic investments made in stronger urban markets in major gateway cities. Also, the company continues to profit from its property renovation, asset management and planned measures.  As such, the company is well poised to maintain its growth curve and simultaneously benefit the shareholders with steadily rising dividends.

As a matter of fact, solid dividend payouts are arguably the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of their annual taxable income in the form of dividends to shareholders.

In addition to Pebblebrook, many other REITs have raised their dividends in the recent months. Recently, Taubman Centers Inc. (TCO) announced an 8.1% hike in its quarterly cash dividend rate, while in February, Simon Property Group Inc. (SPG) raised its dividend by 4.5% sequentially and BRE Properties Inc. (BRE) declared a 2.6% sequential hike in its quarterly cash dividend.

Pebblebrook currently retains a Zacks Rank #3 (Hold).

Read the Full Research Report on PEB

Read the Full Research Report on SPG

Read the Full Research Report on BRE

Read the Full Research Report on TCO

Zacks Investment Research

More From Zacks.com