5 Companies Beating the Market Right Now

So far, 2012 has been great for the hotel industry, and it looks like things are just warming up.

While hotel REITs and brands like InterContinental Hotel Group (NYSE: IHG  ) and Marriott International (NYSE: MAR  ) are companies that do very different things, they are all part of the hotel industry, which is on the rise -- PKF Hospitality Research is forecasting 5.8% overall growth in revenue per available room, or RevPAR, for the industry in 2012 alone.

This gives investors a choice on which way they'd like to get in on the industry's upward trend, whether through branding or real estate. For this Fool, both ways are looking pretty good.

How are they doing so far?
Last November, I added InterContinental to my CAPS page, giving the company a thumbs-up and indicating that I expected it to beat the market over the next few years. Since then, the company is up almost 30%, beating the S&P 500 by nearly 24 percentage points.

And in 2012, the industry as a whole has been doing pretty well, too. Other hoteliers, like Marriott, are also beating the market, and hotel REITs like Pebblebrook Hotel Trust (NYSE: PEB  ) , FelCor Lodging Trust (NYSE: FCH  ) , and Ashford Hospitality Trust (NYSE: AHT  ) are joining in, too -- just as I expected them to:

PEB Chart

PEB data by YCharts

What about the rest of 2012?
In the REIT universe overall, hotel REITs have had the second most dividend increases of any REIT sector so far in 2012, and are forecast to continue raising dividends for the rest of the year. Since REITs are legally required to shell out 90% of their revenues to investors in the form of dividends, it's usually safe to take raised dividends as an indicator of growth.

Not only is PKF Hospitality forecasting a great 2012 for hotels, but it's also expecting 6.6% RevPAR growth in 2013. A lot of 2012's growth has already happened, which is good news for investors looking to get in. The expected slowdown in the second half of the year should present a great opportunity to buy these companies for the long term at a great value.

A growing industry that pays dividends is a great place for investors to put their money. But diversifying is a good idea, too. That's why our analysts have put together a free report detailing the three dow stocks dividend investors need. All three of these stocks have an X factor that makes them stand out from their illustrious Dow peers, making them perfect candidates for your portfolio. Click here to read the report now.

Fool contributor Amanda Buchanan owns shares of Pebblebrook Hotel and InterContinental Hotels Group, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Pebblebrook Hotel Trust. Motley Fool newsletter services have recommended buying shares of Pebblebrook Hotel Trust. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1923291, ~/Articles/ArticleHandler.aspx, 10/31/2014 4:49:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement