Last update on 2024-06-27

Host Hotels & Resorts (HST) - Dividend Analysis (Final Score: 5/8)

Host Hotels & Resorts (HST) dividend analysis: performance and stability evaluated through an 8-criteria scoring system. Final score: 5/8. Learn more.

Short Analysis - Dividend Score: 5

We're running Host Hotels & Resorts (HST) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Dividend Yield Higher than the Industry Average?

Dividend yield compares a company's annual dividend to its share price, showing how much cash flow an investment generates in relation to its price.

Host Hotels & Resorts (HST) has a dividend yield of 4.6225% which is significantly higher than the industry average of 3.12%. Historically, HST's yield has shown considerable variability, peaking in 2008 at 8.5865% and reaching lows in years like 2003 and 2021 when dividends were not paid or were minimal. Despite these fluctuations, the current yield being above the industry average could indicate a more attractive income investment relative to peers. Moreover, the 2023 yield is the highest since 2019, showing a positive trend in recent years. This high yield is beneficial to investors seeking income but requires scrutiny of the company's capacity to sustain these payouts in the face of economic cycles and operational performance.

Average annual Growth Rate higher than 5% in the last 20 years?

The Dividend Growth Rate measures the average annual growth in dividends per share across a specified period. A rate higher than 5% is generally favorable, indicating robust and consistent growth, which can be appealing to dividend-seeking investors.

The dividend growth rate for Host Hotels & Resorts (HST) does not appear to consistently meet the 5% threshold over the past 20 years. Specifically, the dividend per share ratio fluctuates significantly, ranging from positive growth rates such as 719.9183% in 2005 to deep declines like -100% in 2021. These dramatic fluctuations indicate instability, and erratic dividend payments are less attractive to investors looking for reliable, growing income streams. The average dividend ratio of 55.24%, while seeming impressive, is diluted by extreme year-to-year variances. Trend-wise, inconsistent and volatile dividend growth is generally not favorable.

Average annual Payout Ratio lower than 65% in the last 20 years?

The payout ratio indicates how much of a company's earnings are paid out as dividends. It’s crucial for sustainability.

The historical payout ratio values for Host Hotels & Resorts (HST) range between highly positive percentages and negative values, suggesting inconsistencies. Overall, these figures average out to about 8.70%, which is well below the 65% threshold. Due to extreme and negative numbers in several years, this indicates periods of either no dividends or dividends during loss years. It raises concerns about dividend reliability. Thus, while the average looks proportionally low, the underlying volatility suggests potential issues for investors looking for stable dividends.

Dividends Well Covered by Earnings?

Dividends are well covered by the earnings.

The trend from 2003 to 2023 shows a mixed capacity of Host Hotels & Resorts (HST) to cover its dividends with its earnings. A value greater than 1 indicates good coverage where earnings per share (EPS) are more than sufficient to cover dividends per share (DPS). Key years to notice are 2004, 2006, 2011, 2014, and 2016 where the ratio exceeded 1, indicating strong coverage. However, the years 2009, 2011, 2012, 2020, and 2021 have seen negative or zero values in coverage, problematic as the company was either making losses or earnings did not cover the dividends. Analysis: The overall trend is moderately good but highlights potential risk years where dividends might not be sustainable.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow indicates if a company's free cash flow is sufficient to cover its dividend payments, important for dividend sustainability.

Host Hotels & Resorts' (HST) free cash flow coverage of dividends has fluctuated significantly from 2003 to 2023. Key points include consistently high coverage ratios in 2005-2007 and 2013-2017, with the ratio peaking at 1.52 in 2009. Conversely, years like 2020 and 2021 exhibit negative ratios (-0.40 and -1.04 respectively), revealing periods where free cash flows were insufficient to cover dividend payouts. The latest data from 2022 and 2023 show coverage ratios of 0.16 and 0.69, suggesting improvement but still below optimal levels. Overall, HST's ability to cover dividends through cash flow has been inconsistent, signaling potential concerns about dividend sustainability in certain periods.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends over the past 20 years are essential for income-seeking investors as it provides confidence in predictable cash flows and indicates company stability and management's commitment to returning value to shareholders.

Over the past 20 years, Host Hotels & Resorts (HST) has shown considerable variation in its dividends per share, from $0 to $0.9789. Notable drops can be seen: from $0.9789 in 2007 to $0.6363 in 2008, from $0.25 in 2009 to $0.04 in 2010, and from $0.85 in 2019 to $0.2 in 2020. The COVID-19 pandemic's impact is visible in the 2020 dividends, reflecting the industry-wide turbulence. Despite this variability, long-term improvements with drops within a relatively acceptable range make HST an average performer in dividend stability. Such trends neither completely assure dividend stability nor render it unpredictable. Income-focused investors may need to weigh these variations against their income needs and market conditions.

Dividends Paid for Over 25 Years?

How has the consistency of dividend payments been for over 25 years?

Host Hotels & Resorts (HST) has shown variation in its dividend payments across the timeline from 1998 to 2023. It is notable that the company started strong, with a high dividend per share of $2.48 in 1998. However, there have been periods of no dividend payments, particularly in the early 2000s and in 2020, likely due to economic downturns such as the early 2000s recession and the COVID-19 pandemic. On a positive note, Host Hotels & Resorts has seen a rebound in recent years, with dividends reaching $0.9 per share in 2022, showing resilience after discontinuation. This demonstrates that while there have been ebbs and flows, HST has maintained a relatively sustained dividend payout with sharp rebounds following periods of pause. The overall trend of HST’s dividend payments reflects reasonable stability, albeit with distinct phases of interruption. These interruptions could be perceived negatively by some investors; however, the company’s ability to resume and even potentially increase its dividends indicates a capacity for recovery and long-term viability. Therefore, the trend is moderately positive despite the hiatus periods.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable stock repurchases refer to the company's ability to consistently buy back its own shares over a sustained period. Stock buybacks indicate good financial health and return capital to shareholders.

Over the past 20 years, Host Hotels & Resorts has engaged in stock repurchases an average of 5.2172 times. Significant buybacks occurred in the years 2009, 2016, 2017, 2018, 2019, 2020, and 2023. Despite an increasing trend in the number of shares in the earlier years (2003-2015), a more recent pattern of buybacks is evident. The average frequency of buybacks is a promising indicator of the company's financial health and commitment to returning value to shareholders. However, the trend is relatively concentrated in recent years, suggesting the need to analyze underlying factors that prompted earlier share increases.