Sunstone Hotel Investors: A 7.2% Preferred Dividend Yield And A Safe Balance Sheet

Summary

  • Sunstone Hotel Investors offers a very attractive preferred dividend yield thanks to its low LTV ratio (less than 25%).
  • The preferred dividends are exceptionally well-covered: Sunstone needs less than 10% of its pre-dividend AFFO to cover the preferred dividends.
  • Both issues are yielding north of 7%. As there is no material difference, I just keep on buying the one that has the highest yield at that moment.
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Introduction

I have been an avid fan of the preferred shares of Sunstone Hotel Investors (NYSE:SHO). Although I'm not necessarily a big supporter of the hospitality REITs, I am really impressed with how Sunstone

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This article was written by

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The Investment Doctor is a financial writer, highlighting European small-caps with a 5-7 year investment horizon. He strongly believes a portfolio should consist of a mixture of dividend and growth stocks.

He is the leader of the investment group European Small Cap Ideas which offers exclusive access to actionable research on appealing Europe-focused investment opportunities not found elsewhere. The a focus is on high-quality ideas in the small-cap space, with emphasis on capital gains and dividend income for continuous cash flow. Features include: two model portfolios - the European Small Cap Ideas portfolio and the European REIT Portfolio, weekly updates, educational content to learn more about the European investing opportunities, and an active chat room to discuss the latest developments of the portfolio holdings. Learn more.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SHO.PI 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.

I also own SHO.PH and I continue to buy on weakness.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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