Hospitality Properties Trust upgraded; stocks rise

AP News
Posted: Nov 25, 2009 12:12 PM

An analyst upgraded shares of Hospitality Properties Trust Wednesday and said it expects the real estate investment trust to reinstate its cash dividend in 2010.

Newton, Mass.-based Hospitality Properties suspended quarterly dividends in April on what it called severe limitations on capital availability to meet debt obligations. The company had paid common shareholders 77 cents per share in previous quarters.

REITs are required by law to distribute the equivalent of 90 percent of their taxable income as dividends.

Stifel Nicolaus & Co.'s Rod Petrik said in a client note that he expects Hospitality Properties to reinstate a dividend at an annual rate between $1.50 and $2 per share, which would be a quarterly dividend of 37.5 cents to 50 cents. He upgraded the company to "Buy" from "Hold" and initiated a share price target of $22.

Hospitality Properties owns 289 hotels located throughout the United States and in Puerto Rico and Ontario, Canada, as well as 185 travel centers along interstate highways.

Shares of Hospitality Properties climbed 98 cents, or 5.4 percent, to $19.22 in late morning trading. The stock has traded between $8.53 and $21.82 over the past year.