Hotel Property Investments

HPI: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$2.50	Qrqx	Hywmqypf

Hotel Property Earnings: Higher Debt Costs Offset Rent Growth, as Expected

Adrian Atkins

Feb 15, 2024

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.

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