Recent Buy – Apple Hospitality REIT (APLE) $APLE

GA

You read it right, it’s APLE not AAPL.

Background: Apple Hospitality REIT (APLE) operates 179 hotels across the US under the Hilton and Marriott brands

I bought 20 shares of APLE at $18.xx for the yield ~6.3%, this is probably one of those boring monthly dividend stock, as they have not increase dividend since the IPO almost a few years ago. I read the news the Hilton was splitting its REIT ~$18.xx opening, but I didn’t buy it then. But after many weeks of landlording rants, hehehe, I figure, the real estate is still a lucrative business, but I just didn’t want to deal with being a landlord, but I still want to own some Hilton and Marriott real estates… heheh. So, why not, right?

APLE is expected to earn $0.53 for 2nd quarter, and it pays $0.10 monthly, so the company definitely have room to expand or increase its dividend. So $0.30/$0.53 = 56.6% payout ratio. This is superlow compare to the REITs industry, but the company has been expanding Apple REIT six, seven, eight, nine, now ten.

This stock also pays a monthly dividend as mentioned above. So, together with Realty Income (O), it will show up on my monthly dividend income.

It’s 5 more days before $APLE go ex-dividend 5/30/17. So, with this buy, I’ll be able to capture June’s dividend payout and the rest of the year.

With this buy, it’ll add $24 to my annual dividend.

Risks:

Airbnb is probably the biggest threat to the hotel business. However, it might takes many years, and companies are still paying their employees premiums to stay at Hilton and Marriott as Airbnb housing services might be sporadic for many years to come vs the security and the amenities that are offered at American legit hotels.

Hotel REITs are sprone to recession, so the stock will move with the economy. However, I’m planning to hold this stock forever, so it wouldn’t matter if it go down 20-30%, I’d pick up more shares.

 

Full disclosure: I’m long APLE and O

GA

8 Comments

  1. I’ve actually seen a lot of people that are jumping on the bandwagon. I like the fact that the hotel portfolio is diversified across a lot of brands and is not just tied to one major chain. Airbnb poses a threat, but I don’t think it will deal a serious blow to hotels in the same way Uber is dealing a blow to the taxi business. Just my opinion though. nice pickup and this is a stock that I am looking forward to taking a deeper look into.

    Bert

    • Thank for stopping by and commented.

      Since APLE is commonly misspelled of “apple”, my google search didn’t return any dividend investors that have been recently buy it. 🙁 That was why I didn’t include links on my buy.

  2. Interesting pick up. I have seen APLE in many DGI portfolios and even added them to my long term watch list. Still haven’t bought any yet but I like the space they are in despite AirB&B “disruption.” Seems like a great yield you picked up that looks safe too. CLDT is another name I see many own. For now my REITs are just in health. Thanks for sharing.

    • CLDT was bought by dividendmantra. There were a lot of people who bought it. Jason himself has to average down all the way to 400 shares. After that, I think he sold some.

      Healthcare REITs are great long term investment. Can you do some refreshing write up on those companies?

      Retail REITs are getting beat up now because of the fear of rising interests. I’ll eventually owning a bunch of REITs. That’s probably cure my habit of buying a physical property rental hihi. That should be a relieve for Mr.W as I won’t get caught up in fixing the upper fixers.

      My goal is load up on REITs to increase the yields to balance off companies like ENDP that I bought earlier, and it doesn’t pay dividend. Although, the share price move up, but I didn’t feel like I’m getting paid for owning the company.

  3. Of course you are going to be drawn to REITs haha. Interesting pick. I have never heard of them but will for sure have to add it to my watch list for the future and investigate further. Seems like a solid choice from your post. Even though Airbnb may compete, business professionals are going to stick with regular hotels. And you said it, any dips will just add more buying power in the future and you can decrease your overall cost basis.

    • You know it!
      I’m looking forward to your write up if you decided to investigate it further. It’d be awesome to have an extra eye on the stock.

  4. Given your interests in the rentals, I’m not surprised to see you pick this REIT which yields about decent yield and move the portfolio yield to the higher side.

    My top position is also in the hospitality sector and I think the airbnb disruptions have been largely played out too much from the newsmedia.

    • I stayed at Airbnb, I think it’s pretty decent and easy process to get through, but I had to do a lot of research. If airbnb IPO, I’d probably buy some, but I don’t like Uber. 😛

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