Chatham Lodging: Check in to Monthly Dividends

Focus: REITs

Ian Wyatt Image Ian Wyatt Publisher & Chief Investment Strategist, Wyatt Investment Research

We've found a quality high-yield monthly dividend payer that fills a niche in our model portfolio - the hotel real estate sector, explains Ian Wyatt, editor of High Yield Wealth.

Chatham Lodging Trust (CLDT) is a smallish hotel REIT, with an $810 million equity market cap. As of the end of 2015, it owned 38 hotels with an aggregate of 5,678 rooms located in 15 states and the District of Columbia.

Chatham also owns a 10% non-controlling interest in several joint ventures owning 85 hotels with just over 12,000 rooms.

The hotel portfolio is composed of upscale extended-stay and premium-branded select hotels: Residence Inn, Homewood Suites, Hyatt Place, Hilton Garden Inn, Courtyard, and Hampton Inn.

Nearly 50% of the hotels are located on the West Coast, mostly in California and mostly concentrated in Silicon Valley, San Diego, and Los Angeles. 

Twenty percent of the portfolio is concentrated in the Northeast - Pennsylvania through Maine.

Good things really do come in small packages. It's difficult to find anything to dislike about Chatham. Everything is good, because everything you want trending in the right direction with a hotel REIT is trending in the right direction. 

The dividend is currently being paid at the rate of $1.32 per share after being increased 10% earlier this year. In 2011, Chatham paid $0.70 per share in dividends.

The dividend has increased at a 13.5% average annual rate since 2011.