Starwood Hotels Boosts Dividend 150%; Q3 Profit Beats but Revenue Misses (HOT)
Lodging giant Starwood Hotels & Resorts Worldwide, Inc. (HOT) on Thursday posted mixed third quarter earnings results and raised its annual dividend payout by 150%.
The Stamford, CT-based company reported third quarter net income of $170 million, or 87 cents per share, compared with $163 million, or 84 cents per share, in the year-ago period. Excluding one-time items, adjusted profit was 58 cents per share.
Revenue rose 6% from last year to $1.46 billion.
On average, Wall Street analysts expected a smaller profit of 53 cents per share, albeit on higher revenue of $1.48 billion.
Looking ahead, HOT lifted its full-year earnings outlook to a range of $2.55 to $2.57 per share, up from a prior view of $2.49 to $2.56.
In a separate announcement, the company’s board of directors approved a massive 150% increase to its annual dividend. The new payout of $1.25 per share (up from 50 cents) will be paid on Dec. 28 with an ex-dividend date of Dec. 12. Unlike most U.S. companies that issue quarterly dividends, HOT pays its dividend just once a year.
Starwood Hotels shares fell $1.31, or -2.5%, in premarket trading Thursday.
The Bottom Line
Shares of Starwood Hotels (HOT) will now have a 2.34% dividend yield, based on the higher dividend payout amount and last night’s closing stock price of $53.43. The stock has technical support in the $48-$50 price area. If the shares can firm up, we see overhead resistance around the $58-$60 price levels.
Starwood Hotels & Resorts Worldwide, Inc. (HOT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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