Will Hyatt Start Paying Dividends in 2017?
Not a dividend payer
Hyatt’s (H) peer Marriott (MAR) has been paying dividends to investors for the past 16 years. Intercontinental Hotel Group (IHG) also has a history of paying dividends since 2003. Hyatt (H), unlike its peers, does not pay dividends at all.
Other players in the hotel industry have a short dividend payment history. Rival Wyndham (WYN) has been paying dividends since 2007, and Hilton (HLT) started paying dividends in 2015. Although the dividend payouts aren’t high compared to other consumer sectors, these companies have paid out an average of 0.9% of their earnings as dividends.
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Marriott has an indicated dividend yield of 1.8%, which is the lowest among its peers. Wyndham has an indicated dividend yield of 3%, followed by Intercontinental Hotel Group’s (IHG) indicated dividend yield of 2.4% and Hilton’s indicated dividend yield of 1.3%.
Hyatt’s (H) management has not shown any inclination to pay a dividend in the near future, which could be a big downside, especially for dividend investors. Dividends provide comfort to investors as assured cash flows, especially when the markets turn volatile, add to their returns when capital appreciation is low.
You can gain exposure to the consumer discretionary sector by investing in the iShares Russell 1000 Growth ETF (IWF), which invests ~20.7% in the sector and 0.36% in the hotel industry. IWF’s holdings include 0.08% in Wyndham Worldwide (WYN), 0.19% in Marriott International (MAR), 0.08% in Hilton Worldwide Holdings (HLT), and 0.01% in Hyatt Hotels (H).