Hotel Property Investments
HPI: XASX (AUS)
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| A$7.90 | Sgk | Fccxbmlb |
Hotel Property Earnings: Higher Debt Costs Offset Rent Growth, as Expected
No-moat-rated Hotel Property Investments’ soft first-half fiscal 2024 result aligns with our expectations. Adjusted funds from operations fell 2.1% to AUD 18.5 million as 3.4% growth in rental income was offset by higher debt costs. Fiscal 2024 distribution guidance of AUD 0.19 per security was maintained. We lift our fair value estimate by 3% to AUD 3.40 per security, mainly on the time value of money. On a dividend yield of 6.6%, we consider the stock undervalued.