Analysts Praise RLJ Lodging Trust's Preferred Shares for Solid Yield and Value
Analysts are praising RLJ Lodging Trust's preferred shares as a solid investment, with a current yield of 7.6% and a fixed preferred dividend of $1.95 per year. The trust's low debt level and robust financial results have caught the eye of investors.
The analyst, who has long positions in preferred equity of hotel REITs including RLJ, considers RLJ's preferred shares to be a good value for money. The current yield of 7.6% is attractive, and the payout ratio for preferred dividends is around 10% based on anticipated AFFO. RLJ's preferred dividends are comfortably covered by its FFO and AFFO, providing a stable income stream for investors.
RLJ Lodging Trust's LTV ratio is approximately 43% based on the book value of its properties, indicating a healthy balance between debt and equity. The analyst's interest in RLJ's common shares is also notable, given the AFFO per share after considering capex. The analyst may consider a hybrid approach to investing in RLJ Lodging Trust, balancing both preferred and common shares.
The analyst's positive outlook on RLJ Lodging Trust's preferred shares is driven by the trust's robust financials, low debt level, and attractive yields. The analyst's interest in RLJ's common shares further underscores the trust's potential, making it an appealing option for investors seeking a combination of income and growth.
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