A sense that the Federal Reserve will slow the pace of interest rate hikes may be part of the reason real estate investment trusts (REITs) Park Hotels & Resorts Inc. and Weyerhaeuser Co. closed higher last week and hit new three-month highs.
Both Park Hotels & Resorts PK and Weyerhaeuser WY appear to have bottomed late last year. The price action of recent weeks is sending a positive message to shareholders, especially considering how poorly these REITs performed last year.
Park Hotels & Resorts owns 47 brand-name hotels and resorts with 30,000 rooms. The company affiliates with such well-known brands as Hilton, Marriott and Hyatt — Park itself was a Hilton spinoff in 2017. During 2022, funds from operations (FFO) increased by 68.1%. For the past five years, it’s negative 37.4%.
Market capitalization for the company comes to $3.19 billion.
The REIT is trading at a 26% discount from its book value as long-term debt slightly exceeds shareholder equity. The company pays investors a dividend of 6.93%. Park is actively traded with an average daily volume of 3.16 million shares.
The daily price chart is here:
It might be considered a good sign, from a strict chart analyst’s point of view, that the price is back above the declining 200-day moving average (the red line). That the 50-day moving average (the blue line) appears to be turning up is also a potential positive. The relative strength indicator (RSI) below the price chart is now into its Overbought status.
Weyerhaeuser is a specialty real estate investment trust focused on forest products, including the underlying value of the land. The REIT structure means the company is not required to pay federal taxes on income earned from timber harvest activities, but earnings from wood products are subject to taxation.
It’s a major forest products firm with a market capitalization of $25.25 billion.
Weyerhaeuser trades with a price-earnings ratio of 13.62 and at 2.34 times book value. Earnings in 2022 were up by 225.8% and the earnings-per-share growth for the past five years is 44.9%. Shareholder equity is greater than long-term debt. The REIT is actively traded, with an average daily volume of 3.75 million shares.
The company is paying a dividend of 2.1%.
The daily price chart looks like this:
Note that this is another of the REITs with the price now crossing above a declining 200-day moving average and an upward-trending 50-day moving average. There are no guarantees that this kind of price action will continue, but if you own Weyerhaeuser, it’s good to see.
Not investment advice. For educational purposes only.
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