Real estate investment trust (REIT) Ryman Hospitality Properties (RHP 0.09%) focuses on hotel and convention properties. Its business dragged during the height of the pandemic, as people shied away from large group entertainment events. But how will the company fare in this new economic environment?
In this clip from "The Rank" on Motley Fool Live, recorded on May 23, Motley Fool contributors Matthew Frankel, CFP®, and Jason Hall discuss why they believe Ryman could be a smart investment over the right time horizon.
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Matt Frankel: And really impressive numbers. They're really not being affected by inflation. They're very successful in passing that onto their customers. Their average daily room rate they've got in the first quarter was 14% higher than in pre-pandemic levels. Advanced group bookings are 13% above pre-pandemic levels. When you think about how many future room nights there are on the books for group events. I mentioned the big 30% acquisition by NBCUniversal of their entertainment business. They are about to acquire Block 21 in Austin, a big entertainment district. Austin City Limits is there, if anyone's familiar with that. Really impressive company, very entertainment- and convention-focused hotel business. Jason and I both bought this in the depths of the pandemic and it's come back quite a bit, but I still think it has a long way to grow from here.
Jason Hall: You have a stock still probably 15% to 18% below the peak before the pandemic. They still haven't reinstituted a dividend even though the company is back to profitability, I think Matt, correct me if I'm wrong, but there's a good chance this year they're going to have GAAP net income for the full year. They're going to have to pay 90% of that to shareholders in their dividend. I think this is the year we see the dividend come back. I think it was about $0.95 a share before. Investors can look for that to recover over the next couple of years. I think eventually in the next probably two or three years there'll be a larger dividend and the yield on costs, even at this pretty optimistic price I think is set up to be a very good long-term investment.
