RLJ Lodging Trust: Common Dividend Should Return Soon But Stick With Preferred
Summary
- RLJ Lodging Trust is out of cash burn mode and delivered its first positive funds from operations since the start of the pandemic.
- Occupancy and daily rates are still below 2019 levels due to business travel remaining weak.
- If optimistic industry forecasts for 2022 are achieved, RLJ should be able to raise the common dividend but not to pre-pandemic levels.
- Business travel recovery remains uncertain and growth strategy is modest, so preferred shares are a better choice for income investors.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of RLJ.PA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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