April 3, 2024 • 35 mins
In this episode, we look at the world’s largest publicly traded lodging REIT. Does a return of over 161% make this dividend stock worthy of consideration?
I also cover the following topics in this episode:
- Our stock under review (HST)
- Our 12 Rules and 10 Criteria
- Applying the 12 Rules of Simply Investing
- Historical rate of return (161% vs 961%)
- Conclusion
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Transcript
Episode Transcript
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Speaker 1 (00:01):
In this episode we look at the world's largest
publicly traded lodging, reit.
Does a return of over 161% makethis dividend stock worthy of
consideration?
Stay tuned as I give you abehind-the-scenes look at my
stock review process.
Hi, my name is Kanwal Sarai andwelcome to the Simply Investing
(00:24):
Dividend Podcast.
In this episode, we're going tocover the following four topics
.
We'll start with our stock, ourdividend stock under review, so
I'm going to introduce thestock to you and give you some
information about the company aswell.
In the next section, we aregoing to cover the 12 rules of
(00:46):
Simply Investing and the 10 SIcriteria.
Then I'm going to show you howI apply the 12 rules of Simply
Investing to this company thatwe're reviewing in today's
episode, and then we'll look atthe historical rate of return
and the conclusion at the end ofthis episode.
So let's get started with ourtopic number one, our stock
(01:08):
under review.
So the stock that we are goingto be reviewing in this episode
is Host Hotels and Resorts, andthey go by the stock ticker
symbol of HST, and it is acompany that is traded in the US
.
This is coming to us thisepisode as a result of an
(01:31):
audience question and thequestion I received by email
recently was is the host hoteland resorts worth considering as
an investment?
And the person that emailed mehad done some research already
on the stock.
They felt that it was a goodstock but they weren't sure and
(01:51):
they wanted to know is it worthlooking into as an investment,
as a dividend stock?
So that's what we're going tolook at in today's episode and
so, like I mentioned, thecompany we're going to look at
today is Host Hotels and Resorts.
Now this quote is comingdirectly from the company's
(02:11):
website.
You can see the website up onthe screen here and the company
says, I quote we are the world'slargest publicly traded lodging
REIT, with a geographicallydiverse portfolio of luxury and
upper scale hotels across theUnited States.
The company owns a total of 77hotels and resorts with a
(02:35):
combined capacity of 42,000rooms, and they own a number of
hotels under a lot of brandnames that you will recognize.
So the majority brands areMarriott, hyatt, four Seasons
and the Westin and a couple ofother brands, but I just wanted
to list off the major fourbrands here.
(02:58):
The company has a total of 163employees.
Company has a total of 163employees.
They're based in the US andthey have a market cap, as of
this recording, of a little over$14.4 billion.
The current share price, againas of this recording, is $20.30
and the current dividend yieldis 3.5%.
(03:22):
So now let's go on to our nextsection.
In this episode, I'm going totell you what the 12 rules are,
the 12 rules of Simply Investing, what is the 10 criteria, and
then, in the following section,we are going to apply those
rules and the criteria to thecompany we're looking at today.
So you can see the 12 rules upon the screen.
(03:44):
If you've been watching otherepisodes of our podcast, you
might already be familiar withthe 12 rules.
I'm gonna go through thosefairly quickly right now and
then we'll jump into moredetails as we go forward.
So rule number one, the simplyinvesting rule, is do you
understand how the company ismaking money?
(04:05):
If not, skip it, move on tosomething else, right?
So these 12 rules is basicallyyour checklist.
You want to make sure, beforeyou invest in any company, that
it passes all of the 12 rules ofsimply investing.
Ok, so let's move on to rulenumber two 20 years from now,
will people still need itsproduct and services?
(04:26):
Rule number three does thecompany have a low cost
competitive advantage.
Rule number four is the companyrecession proof.
And rule number five it's intwo parts and what we look at is
to see if the company isprofitable, and we're going to
go into more detail in just aminute here.
Rule number six does thecompany grow its dividend?
Rule number seven can thecompany afford to pay the
(04:48):
dividend?
Rule number eight is the debtless than 70%.
Rule number nine we want toavoid any company with a recent
dividend cut.
Rule number 10, does thecompany buy back its own shares?
Rule number 11, is the stockpriced low?
And that's in three parts andwe're going to cover those three
parts in just a few minutes.
And rule number 12, keep youremotions out of investing.
(05:12):
Now.
To help speed up the process,I'm going to jump in to the
Simply Investing platform injust a few minutes.
The Simply Investing platformapplies rules number 5 to 11 to
every stock in the US and inCanada.
So there's about over 6,000stocks and the platform applies
(05:36):
rules number 5 to rule number 11to over 6,000 stocks every
single day and it does itautomatically.
It is a web application thatyou log into.
I'm going to show you what itlooks like when I log into it
and it's going to help speed upthe process.
So for us, it's going to coverrules number five to rule number
(05:58):
eleven.
So you can see those arehighlighted in bold on the
screen right now.
Now, let's not forget, you arestill responsible for rules
number 1 to 4 and rule number 12.
Like I said at the beginning ofthis episode, I'm going to take
you through all of the 12 rulesvery shortly.
(06:19):
Now let's cover the rule 5 to 11first, because the platform
does that for us, so let's lookat those first.
So in a little bit more detail,like I said, rule number five
was divided into two parts of 5Aand B, so I'm going to go
through these in a little bitmore detail.
So rule number 5A states thatthe average EPS growth over the
(06:43):
last 20 years must be 8% or more.
If not, the company fails rulenumber 5A and we skip it and
move on to something else.
Rule number 5B we want to seeat least 8 increases in earnings
, eps increases in the last 20years 8 or more.
Rule number 6, the averagedividend growth must be 8% or
(07:07):
more.
Rule number seven the payoutratio must be 75% or less.
Rule number eight the debt mustbe 70% or less.
Rule number nine if the companyhas had a recent dividend cut,
we're going to skip it.
So that's what we check for inrule number nine.
Rule number 10, does the companybuy back its own shares.
And rule number 11, as Imentioned before, is in three
(07:28):
parts.
So rule 11A looks at the PEratio and we want to make sure
that the PE ratio is 25 or less.
Rule number 11B is to comparethe current dividend yield to
the company's average 20-yeardividend yield and for a stock
to be considered undervalued orprice low, the current yield
(07:51):
must be higher than its average20-year yield.
If you want more information onthat, on how we determine this
and some real-life examples, Iencourage you to go back and
watch episode 1 in our dividendpodcast, where we cover rule
number 11b in a lot more detail.
Rule number 11c is to look atthe pb ratio, the price to book
(08:13):
ratio, and it must be three orless.
So if you look at the screenhere, like I said, rules number
five to 11.
Now, rule number five is in twoparts, 11 is in three parts.
So if you count all of therules here, there's actually we
call them criteria there's the10 simply investing criteria,
(08:36):
and that's what you see on thescreen here, and so the simply
investing platform will applyeach of these 10 SI criteria to
every stock in the US and inCanada every single day.
So the platform then will giveyou automatically, tell you,
what the SI score is.
(08:57):
So if a company passes only onecriteria on the screen, it's
going to get one out of 10.
If it passes two, it'll get twoout of 10.
What we want to look for is acompany going to get one out of
10.
If it passes two, it'll get twoout of 10.
What we want to look for is acompany that gets a 10 out of 10
, which means it passes all ofthe 10 SI criteria that you see
on the screen here.
So does our company today, theone we're looking at, hst right,
(09:21):
the host hotels and resortsdoes it get a 10 out of 10?
Does it get a 9 out of 10?
We're going to find out in justa couple of minutes, as we
apply not only the 10 SIcriteria but all of the 12 rules
of Simply Investing.
So let's jump into that rightnow, into our next section.
(09:44):
So, like I mentioned, rulesnumber five to rule number 11
are covered by the SimplyInvesting platform.
So we're going to jump into theSimply Investing platform right
now and then we're going totake a look at the SI criteria.
The score Does the company get10 out of 10, 9 out of 10 or 8?
We're going to find out rightnow.
To get 10 out of 10, 9 out of10 or 8?
(10:07):
We're going to find out rightnow.
So you can see on the screenright now.
I'm logged into the SimplyInvesting platform.
I've already done a search forour company, host Hotels and
Resorts, and you can see it upon the screen right here.
You can see the stock symbol,you can see the current stock
price and some information onthe company itself.
What we're going to do isscroll down to our table right
(10:31):
here.
I'm going to go ahead and hidesome of the columns that we
don't really need for thisepisode here, so that'll just
make it a little easier becausethere's a lot of data in each of
these tables.
But if I hide and just focus onthe ones we're looking at,
let's go through those right now.
So, like I said before, theSimply Investing platform covers
(10:54):
the rules number 5 to 11.
So let's take a look here.
Rule number 5A it's right here.
It says average EPS growth overthe last 20 years.
Now if you forget what the rulewas, you can always hover over
the question mark here.
So it says EPS growth of 8% ormore, and we can see that the
(11:15):
company has EPS growth of 105%.
So it certainly passes rulenumber 5A.
Let's move on to rule number 5b.
It says number of EPS increasesin the last 20 years and we're
looking for eight or moreincreases in the EPS earnings
per share, and we can see thatthe company has had 11 increases
(11:37):
in the last 20 years.
So again, it passes rule number5b.
Let's move on to rule number sixaverage dividend growth over
the last 20 years.
And we want to see 8% or morein order for a company to pass
rule number 6.
So you can see it gets 22.9%.
(11:58):
So of course it passes rulenumber 6.
Rule number 7 is the payoutratio.
It's got to be 75% or less, andyou can see that it is 69.23.
So that's very good and thecompany passes rule number seven
.
Let's move on to rule numbereight.
We want to see the debt, thelong-term debt to equity ratio
(12:19):
of 70% or less, and the companyhas currently a long-term debt
to equity ratio of 51%, so we'regood.
It passes rule number eight.
Let's move on to rule numbernine.
This one is checking to makesure that there has not been a
dividend cut recently.
So what we do here is we lookat the current dividend and the
(12:43):
previous year dividend, and sowe can see the dividend has
actually gone up by 33% from theprevious year, so that's good.
So there has been no dividendcut recently.
Share buyback so of course thiscompany is doing share buybacks
.
Again, we look at the number ofoutstanding shares today
compared to the year before, andif we have less outstanding
(13:06):
shares today than the yearbefore, then we know that the
company has done some type ofshare buyback.
So it passes rule number 10.
The rule number 11A is to lookat the PE ratio, and it's got to
be 25 or less, and we can seethat it's sitting right now at
19.54.
So that's good.
Rule number 11b was to comparethe current yield.
(13:30):
We want to make sure it'shigher than the average 20-year
yield, and it is.
So we identify the stock asbeing undervalued or priced low.
So the company passes rulenumber 11b as well.
Rule number 11C is to look atthe PB ratio and we want to make
sure it's three or less, andyou can see that it's currently
(13:52):
sitting at 1.97.
So that is very good.
So the company passes rulenumber 11C as well.
And then, finally, you can seethe SI criteria, which is the 10
criteria we just went throughright Rules number 5 to 11.
Remember, rule number 5 is intwo parts.
Rule number 11 is in threeparts.
(14:12):
So we have a total of 10 SIcriteria and you can see that
the company gets a 10 out of 10because it passes all of the 10
criteria that you can see on thescreen right now.
Now there's a couple of thingswe want to check while we're
here.
Anyway, just because a companypasses all of the criteria and
(14:35):
gets a 10 out of 10, it stillmay or may not be a high quality
company that you may want toinvest in.
So let's look at some of thosethings.
So by default here you can seewe're looking at the average
stock price.
I've set the the length to max,so our data goes back to 1999.
(15:02):
So since then you can see thatthe average stock price has been
pretty much hasn't changed,right, if I was to draw like a
straight line here, right?
What we want to see is a slopethat's increasing over time, and
it really hasn't.
You can see that the stockprice is around $20 today and
(15:23):
that's where it was last yearand even in 2013, 2017, 2005,
2007, 2017, 2005, 2007,.
It's still hovering around $20,right or plus or minus $2.
So between $18 to $22.
And the price has not goneanywhere outside of that range.
(15:47):
So this doesn't look promising.
But let's continue, right,we're going to continue.
So the other thing I want toshow you is the.
Let's look at the dividends pershare.
So now you can see that thedividends per share since 1999,
(16:09):
we see a couple of times wherethe company has cut the dividend
to zero, right?
So this is not a very goodgraph.
You can see that the thecompany cuts the dividend, then
they increase the dividend, thenthey drop the dividend, then
they increase it and then theydrop it again.
So this is very random.
It doesn't give us a high levelof confidence as to what's
(16:33):
going to happen to the dividendin the future.
Now I'm going to give you anexample here.
This is a completely differentcompany, but it is a dividend
stock, but it's a differentindustry, different sector, but
I just want to illustrate to youwhat we look for.
So I'm going to switch over tothis tab, and this is Texas
Instruments.
(16:54):
And, by the way, you can seethe average stock price.
So this graph looks a lotbetter than what we just saw
before for the average stockprice.
So the stock price has beensteadily increasing over the
long term.
But now let's take a look atdividend per share over the long
term.
But now let's take a look atdividend per share.
So this is a nice graph.
(17:16):
Right Since 1999, you can seethat the dividend per share has
been growing.
So this is a nice graph.
This is what we want to see.
We want to see a steadyincrease in the dividend over
time.
But we're not seeing that withour company host hotels.
So again, let's keep going.
(17:38):
It doesn't look promising, butlet's keep going.
So now we're going to look atone more thing, which is the EPS
earnings per share.
So here you can see theearnings per share.
There's a couple of times whereit goes negative, which means
the company lost money in 2002,2003, 2004, 2009.
(17:59):
So you can see a couple ofplaces where it lost money.
Again, what we want to see is anice slope where the earnings
are growing over time, and herethey're not.
Let's jump over to TexasInstruments again.
I'm going to look at the sametype of graph earnings per share
and you can see.
(18:20):
Of course you know there's dipswhere earnings go down, but
then it comes back up againOverall, generally over the long
term.
If you look at the slope ofthis line, it's going up over
time, right?
So this is good because itgives us some degree of
(18:41):
confidence that the company willcontinue to grow its earnings
over time, because they've doneso since 1999.
But when we go back to hosthotels, but when we go back to
host hotels, this graph, thisline, doesn't tell us much.
It's completely random.
So I don't know.
Next year are the earningsgoing to go up, are they going
(19:01):
to go down?
We don't know.
And the same thing with thedividend per share.
Is the company going to pay adividend next year?
We don't know.
Is the dividend going to go up,it's going to go down?
We don't know.
Is the dividend going to go up,it's going to go down?
We don't know.
That's hard to predict.
Whereas if we go back to TexasInstruments, we look at
dividends per share, we can havesome degree of confidence that
(19:24):
the company will at least pay usa dividend next year and
hopefully grow the dividend aswell, because it is on an
incline.
Because it is on an incline Nowthat we've checked the 10 SI
criteria score in the platform,we can see that the company gets
a 10 out of 10.
We don't want to forget aboutrules number 1 to 4 and rule
(19:46):
number 12.
So let's look at those rightnow.
So rule number 1, do youunderstand how the company is
making money?
And in this case we do.
The company is called HostHotels and Resorts.
They're making money by rentingout rooms in their hotel and
resorts, and that's how thecompany earns revenue.
On rule number two 20 yearsfrom now will people still need
(20:10):
its product and services?
And I'm going to say yes,hotels have been around for a
very long time.
Same thing with resorts.
And 20 years from now, ofcourse, I think people will
still be going on vacation,traveling to places, visiting
family and friends, and so theywill need places to stay.
(20:31):
So hotels sure would still bein demand of some type in the
next 20 years.
So I'm going to say, for now,the company passes rule number
one passes rule number two.
Rule number three does thecompany have a low cost
competitive advantage?
So this is a tricky one becausetypically the companies that
(20:54):
pass rule number three areabsolute giants in their
industry, and these are bluechip stocks, something like
Coca-Cola, walmart, mcdonald's.
These are very, very largecompanies, well-established, and
they have household names.
Now, I know this company here.
(21:16):
They do have hotels under theMarriott brand, under the Westin
brand and a couple of othernames that you might be familiar
with.
So in a way, sure that's a goodcompetitive advantage.
In a way, sure that's a goodcompetitive advantage.
But in terms of size, thecompany is fairly small.
Right, we looked at it earlier163 employees and a market cap
(21:40):
of $14 billion.
There are companies out therewith a market cap of hundreds of
billions of dollars and 30, 40,50, 100,000 employees or more,
right, so much much largercompanies that can take
advantage of economies of scale.
So I'm kind of on the fenceright now.
(22:00):
I'm not sure if the companypasses rule number three, but
I'm going to give the companythe benefit of the doubt and for
now we'll say it passes rulenumber three.
Three, and let's move on to rulenumber four.
Is the company recession proofand in my opinion, it's not,
(22:22):
because we've seen what happenedduring COVID to hotels.
We saw what happened during9-11, when people stopped
traveling, getting on planes,staying at hotels, and so when
there is a recession or there'sa chance you may lose your job,
(22:43):
you're probably not going totravel overseas or on expensive
trips and you're not going to bestaying in hotels right, and
you're not going to be stayingin hotels, right, and we saw
that especially during COVID-19,when a lot of people stopped
traveling, couldn't travel, andeven for business travel, a lot
(23:04):
of the meetings were being heldonline.
So, in my opinion, the companyfails rule number four and I
would say that it is notrecession proof.
Now rules number five to 11,we've already covered in the
Simply Investing platform, soI'm going to move on.
We saw that it passed all ofthose rules, and rule number 12,
(23:26):
of course, is to keep youremotions out of investing, and
we talk a lot about this in theSimply Investing course and how
to actually accomplish that.
Okay, so to finish off thissection here, in this episode,
the company passes 11 out of the12 Simply Investing rules,
(23:50):
right, as we saw, it did notpass rule number four, where
we're looking for companies thatare recession proof Now.
Is the company still worthconsidering?
Maybe, maybe not.
We're going to take a look atthe historical rate of return.
Maybe that will help us makeour decision.
(24:11):
So for this I'm going to goback to 2004 and to 2024.
So we're going to cover a20-year period.
So we want to cover a longperiod of time because it takes
into consideration the ups anddowns of the stock market.
So when we have a bull marketor we have a bear market, right
(24:33):
if the market's down, themarket's up, or there's a
recession or a downturn, in thelast 20 years we've experienced
all of those things.
So any company that can survivethose last 20 years and come
out at the top might be worthconsidering.
So we're going to look at thelast 20 years and see how well
(24:56):
our company, host Hotel andResorts, has done so.
In this example I'm going to usean investment of $10,000.
So let's say, in 2004, youinvested $10,000 into this
company, host Hotel and Resorts,and, of course, the time frame
is 20 years.
The ending value so what we'redoing is we're looking at the
(25:20):
stock price today as of thisrecording, plus we're adding up
all of the dividends receivedover the last 20 years, the
investment would be worth todayover $26,000.
So that's pretty good.
The rate of return is 161%.
(25:43):
So how do we know if this is agood return?
Is it a decent return?
Is it mediocre?
Is it not that great?
Because just looking at thenumber seems like it's fine, but
how do we know if it's good orbad?
So what I'm going to do hereand again is just to illustrate
(26:03):
this example.
I'm going to compare it toanother company and again, this
company is not in the sameindustry, it's not in the same
sector, but it is a dividendstock, and I just want to
illustrate to you of what'spossible when it comes to
investing in dividend stocks.
So it's going to be the samecompany we looked at in the
(26:24):
Simply Investing platform, whichwas Texas Instruments, right?
So I'm going to show that up onthe screen in just a second.
There was one other number Iwanted to show you here, which
was the dividend yield on cost,which is the dividend yield
based on the original purchaseprice back in 2004 for host
hotels and resorts, and you cansee that today it is 6.18
(26:48):
percent.
So that is the return on yourinvestment while you hold on to
these shares.
So if you still hold on to them, you can expect this year to
earn 6.18% of $10,000, becauseit's based on your original
investment in dividends.
And remember, dividends aredeposited automatically into
(27:11):
your trading account as cash,and so you can spend that money
if you wish, or you can reinvestit.
Okay.
So now that we have all the datafor host hotels and resorts, I
want to compare it to TexasInstruments Again.
I know it's not in the sameindustry.
It's just to illustrate what'spossible with dividend stocks.
Illustrate what's possible withdividend stocks.
(27:38):
So, texas Instruments sameamount $10,000 invested back in
2004.
So the same 20 year period thatinvestment would be worth today
over $106,000.
You can see the numbers up onthe screen here.
That is a rate of return of961%, versus host hotels and
resorts, which returned us 161%.
(27:58):
So that is a huge difference inthe rate of return.
And more important to us asdividend investors is the
dividend yield on cost.
Texas Instruments today, inthis example, would provide you
with over 26% annually individends, and that's 26% of
(28:20):
$10,000, and and dividends wouldbe returned to you just for
holding on to those shares.
So if we were to just to lookat the numbers on the screen
here.
Texas Instruments would havebeen a better investment than
host hotels and resorts.
So why are we looking at thepast?
(28:40):
The reason is we cannot predictthe future.
We don't know how thesecompanies are going to do in the
future.
We don't know if they're goingto pay a dividend.
Predict the future we don'tknow how these companies are
going to do in the future.
We don't know if they're goingto pay a dividend in the future.
So what we do is we can look atthe historical rate of return
over the last 20 years, which isa long period of time, and that
can give us some level ofconfidence as to what to expect
(29:02):
in the next 5, 10, 15, or 20years of holding on to these
companies.
So what is the conclusion here?
So the conclusion is a coupleof things.
I want to go through them allwith you right now.
If you are a brand new dividendinvestor and you're looking to
get started building a dividendstock portfolio you don't own
(29:26):
any other stocks building adividend stock portfolio, you
don't own any other stocks thenin this case, I would skip host
hotels and resorts and move onto something else.
Why?
Because the company passes 11out of the 12 rules of simply
investing.
And remember what I said at thebeginning of the video we only
want to invest in companies whenthey pass all of the 12 rules.
(29:48):
If there's even one failure, weskip it, move on to something
else.
Why do we do that?
Because we want to minimize ourrisk to our hard-earned money.
So for any new investors, Iwould skip it.
That's what, in my opinion,that's what I would do Now.
When we took a look at theearnings per share growth, you
(30:10):
could see that it was erratic.
Since 1999, the earnings havebeen erratic.
They're not going up steadilylike we like to see, so that's
kind of that's a negative right.
I know the company passed allof the 10 SI criteria and got a
10 out of 10.
But still, if I look at theearnings EPS graph, it's erratic
(30:34):
.
So to me that's a bit of aminus right Sort of a yellow
flag there.
If we look at the dividendgrowth, also it was erratic,
right.
The company had not paid adividend for a couple of years.
Then it started up again, thenit decreased the dividend, then
it paid another dividend.
So it was just random.
(30:55):
And again we want to see a nicesteady graph where it just goes
up, and this company didn't dothat right, so that's a negative
there too.
Then, when we took a look at thehistorical rate of return, 161%
return over 20 years is notthat great compared to Texas
Instruments, which had a returnof over 961% during the same
(31:20):
period.
So the rate of return not thatgreat.
And also the company is small.
They've got 163 employees, capof 14 billion.
Like I said, generally when welook at companies, they're very
large in the hundreds ofbillions of dollars market cap
(31:40):
and 30, 40, 50, 000, 100, 000employees more, and so they are
much, much, much largercompanies and especially when
you're starting to invest individend investing, we want to
start off with the large,well-established blue chip
companies first and foremost,before you start looking at
(32:04):
other smaller companies in thespace.
Now, if you already have awell-diversified dividend
portfolio, you've got a lot ofexperience, you've been
collecting dividends for many,many, many years and you are now
looking to diversify yourportfolio and you don't have any
(32:26):
hotels or REITs in yourportfolio, then you may consider
this company that we're lookingat today and even then I would
suggest, if you don't have anyother hotel stocks or don't have
any other REITs again, I wouldsuggest that you look at the
(32:48):
bigger companies first and ifthey're not passing the 12 rules
of Simply Investing, then thebest thing to do is to wait.
There is no harm in waiting.
We always want to pick up highquality stocks, and you can only
pick up high quality stocks iswhen they pass all of the 12
(33:11):
rules of simply investing.
Okay, so that's a lot ofinformation there.
I hope that's going to help youto make a good, solid decision.
Does this mean that you shouldgo out and buy any stock today
that pays a dividend?
And the short answer is no.
(33:31):
Our approach to investing is toinvest in quality, dividend
paying stocks when they arepriced low, and the key words
here are quality stocks, notjust any stock.
It's got to be a dividendpaying stock and not just at any
price.
It should be priced low orundervalued.
How do you know, when you'relooking at a stock, if it's a
(33:52):
quality stock and if it's pricedlow?
So to help you with that, I'vecreated what I call the 12 rules
of simply investing, and we'vecovered all of the rules in
today's episode, so you can seethem up on the screen again, but
I'm not going to go throughthem again because we've just
covered them a couple of minutesago, at the beginning of this
episode.
(34:12):
So, for those of you that areinterested, I've created the
Simply Investing course.
It is an online self-pacedcourse.
It's in 10 modules.
Module 1 covers the investingbasics.
Module 2 covers the 12 rules ofSimply Investing.
Module three shows you how toapply the 12 rules.
Module four shows you theSimply Investing platform and we
(34:35):
took a quick look at it intoday's episode.
Module five placing your firststock order.
Module six building andtracking your portfolio.
Module seven when to sell astock, which is just as
important as to know when to buy.
Module 8, how to reduce yourfees and risk, especially if you
have mutual funds, index fundsand ETFs.
(34:58):
Module 9 is your action plan toget started right away.
And module 10, I answer yourmost frequently asked questions.
And module 10, I answer yourmost frequently asked questions
and, of course, we showed youthe Simply Investing platform in
today's episode.
The platform applies the 10 SIcriteria to over 6,000 companies
(35:19):
in the US and in Canada everysingle day.
So you'll know very quickly ifthis is a stock you should
consider investing in or if thisis a stock.
You should skip or avoid fornow.
So if you're interested, youmay want to write down the
coupon code SAVE10.
It'll save you 10% off of thecourse or the Simply Investing
(35:43):
platform as well.
If you enjoyed today's episode,be sure to hit the subscribe
button.
Hit the like button as well.
We have a new episode out everyweek and for more information,
take a look at our website,simplyinvestingcom.
Thanks for watching.
In this episode we look at the world's largest
publicly traded lodging, reit.
Does a return of over 161% makethis dividend stock worthy of
consideration?
Stay tuned as I give you abehind-the-scenes look at my
stock review process.
Hi, my name is Kanwal Sarai andwelcome to the Simply Investing
(00:24):
Dividend Podcast.
In this episode, we're going tocover the following four topics
.
We'll start with our stock, ourdividend stock under review, so
I'm going to introduce thestock to you and give you some
information about the company aswell.
In the next section, we aregoing to cover the 12 rules of
(00:46):
Simply Investing and the 10 SIcriteria.
Then I'm going to show you howI apply the 12 rules of Simply
Investing to this company thatwe're reviewing in today's
episode, and then we'll look atthe historical rate of return
and the conclusion at the end ofthis episode.
So let's get started with ourtopic number one, our stock
(01:08):
under review.
So the stock that we are goingto be reviewing in this episode
is Host Hotels and Resorts, andthey go by the stock ticker
symbol of HST, and it is acompany that is traded in the US
.
This is coming to us thisepisode as a result of an
(01:31):
audience question and thequestion I received by email
recently was is the host hoteland resorts worth considering as
an investment?
And the person that emailed mehad done some research already
on the stock.
They felt that it was a goodstock but they weren't sure and
(01:51):
they wanted to know is it worthlooking into as an investment,
as a dividend stock?
So that's what we're going tolook at in today's episode and
so, like I mentioned, thecompany we're going to look at
today is Host Hotels and Resorts.
Now this quote is comingdirectly from the company's
(02:11):
website.
You can see the website up onthe screen here and the company
says, I quote we are the world'slargest publicly traded lodging
REIT, with a geographicallydiverse portfolio of luxury and
upper scale hotels across theUnited States.
The company owns a total of 77hotels and resorts with a
(02:35):
combined capacity of 42,000rooms, and they own a number of
hotels under a lot of brandnames that you will recognize.
So the majority brands areMarriott, hyatt, four Seasons
and the Westin and a couple ofother brands, but I just wanted
to list off the major fourbrands here.
(02:58):
The company has a total of 163employees.
Company has a total of 163employees.
They're based in the US andthey have a market cap, as of
this recording, of a little over$14.4 billion.
The current share price, againas of this recording, is $20.30
and the current dividend yieldis 3.5%.
(03:22):
So now let's go on to our nextsection.
In this episode, I'm going totell you what the 12 rules are,
the 12 rules of Simply Investing, what is the 10 criteria, and
then, in the following section,we are going to apply those
rules and the criteria to thecompany we're looking at today.
So you can see the 12 rules upon the screen.
(03:44):
If you've been watching otherepisodes of our podcast, you
might already be familiar withthe 12 rules.
I'm gonna go through thosefairly quickly right now and
then we'll jump into moredetails as we go forward.
So rule number one, the simplyinvesting rule, is do you
understand how the company ismaking money?
(04:05):
If not, skip it, move on tosomething else, right?
So these 12 rules is basicallyyour checklist.
You want to make sure, beforeyou invest in any company, that
it passes all of the 12 rules ofsimply investing.
Ok, so let's move on to rulenumber two 20 years from now,
will people still need itsproduct and services?
(04:26):
Rule number three does thecompany have a low cost
competitive advantage.
Rule number four is the companyrecession proof.
And rule number five it's intwo parts and what we look at is
to see if the company isprofitable, and we're going to
go into more detail in just aminute here.
Rule number six does thecompany grow its dividend?
Rule number seven can thecompany afford to pay the
(04:48):
dividend?
Rule number eight is the debtless than 70%.
Rule number nine we want toavoid any company with a recent
dividend cut.
Rule number 10, does thecompany buy back its own shares?
Rule number 11, is the stockpriced low?
And that's in three parts andwe're going to cover those three
parts in just a few minutes.
And rule number 12, keep youremotions out of investing.
(05:12):
Now.
To help speed up the process,I'm going to jump in to the
Simply Investing platform injust a few minutes.
The Simply Investing platformapplies rules number 5 to 11 to
every stock in the US and inCanada.
So there's about over 6,000stocks and the platform applies
(05:36):
rules number 5 to rule number 11to over 6,000 stocks every
single day and it does itautomatically.
It is a web application thatyou log into.
I'm going to show you what itlooks like when I log into it
and it's going to help speed upthe process.
So for us, it's going to coverrules number five to rule number
(05:58):
eleven.
So you can see those arehighlighted in bold on the
screen right now.
Now, let's not forget, you arestill responsible for rules
number 1 to 4 and rule number 12.
Like I said at the beginning ofthis episode, I'm going to take
you through all of the 12 rulesvery shortly.
(06:19):
Now let's cover the rule 5 to 11first, because the platform
does that for us, so let's lookat those first.
So in a little bit more detail,like I said, rule number five
was divided into two parts of 5Aand B, so I'm going to go
through these in a little bitmore detail.
So rule number 5A states thatthe average EPS growth over the
(06:43):
last 20 years must be 8% or more.
If not, the company fails rulenumber 5A and we skip it and
move on to something else.
Rule number 5B we want to seeat least 8 increases in earnings
, eps increases in the last 20years 8 or more.
Rule number 6, the averagedividend growth must be 8% or
(07:07):
more.
Rule number seven the payoutratio must be 75% or less.
Rule number eight the debt mustbe 70% or less.
Rule number nine if the companyhas had a recent dividend cut,
we're going to skip it.
So that's what we check for inrule number nine.
Rule number 10, does the companybuy back its own shares.
And rule number 11, as Imentioned before, is in three
(07:28):
parts.
So rule 11A looks at the PEratio and we want to make sure
that the PE ratio is 25 or less.
Rule number 11B is to comparethe current dividend yield to
the company's average 20-yeardividend yield and for a stock
to be considered undervalued orprice low, the current yield
(07:51):
must be higher than its average20-year yield.
If you want more information onthat, on how we determine this
and some real-life examples, Iencourage you to go back and
watch episode 1 in our dividendpodcast, where we cover rule
number 11b in a lot more detail.
Rule number 11c is to look atthe pb ratio, the price to book
(08:13):
ratio, and it must be three orless.
So if you look at the screenhere, like I said, rules number
five to 11.
Now, rule number five is in twoparts, 11 is in three parts.
So if you count all of therules here, there's actually we
call them criteria there's the10 simply investing criteria,
(08:36):
and that's what you see on thescreen here, and so the simply
investing platform will applyeach of these 10 SI criteria to
every stock in the US and inCanada every single day.
So the platform then will giveyou automatically, tell you,
what the SI score is.
(08:57):
So if a company passes only onecriteria on the screen, it's
going to get one out of 10.
If it passes two, it'll get twoout of 10.
What we want to look for is acompany going to get one out of
10.
If it passes two, it'll get twoout of 10.
What we want to look for is acompany that gets a 10 out of 10
, which means it passes all ofthe 10 SI criteria that you see
on the screen here.
So does our company today, theone we're looking at, hst right,
(09:21):
the host hotels and resortsdoes it get a 10 out of 10?
Does it get a 9 out of 10?
We're going to find out in justa couple of minutes, as we
apply not only the 10 SIcriteria but all of the 12 rules
of Simply Investing.
So let's jump into that rightnow, into our next section.
(09:44):
So, like I mentioned, rulesnumber five to rule number 11
are covered by the SimplyInvesting platform.
So we're going to jump into theSimply Investing platform right
now and then we're going totake a look at the SI criteria.
The score Does the company get10 out of 10, 9 out of 10 or 8?
We're going to find out rightnow.
To get 10 out of 10, 9 out of10 or 8?
(10:07):
We're going to find out rightnow.
So you can see on the screenright now.
I'm logged into the SimplyInvesting platform.
I've already done a search forour company, host Hotels and
Resorts, and you can see it upon the screen right here.
You can see the stock symbol,you can see the current stock
price and some information onthe company itself.
What we're going to do isscroll down to our table right
(10:31):
here.
I'm going to go ahead and hidesome of the columns that we
don't really need for thisepisode here, so that'll just
make it a little easier becausethere's a lot of data in each of
these tables.
But if I hide and just focus onthe ones we're looking at,
let's go through those right now.
So, like I said before, theSimply Investing platform covers
(10:54):
the rules number 5 to 11.
So let's take a look here.
Rule number 5A it's right here.
It says average EPS growth overthe last 20 years.
Now if you forget what the rulewas, you can always hover over
the question mark here.
So it says EPS growth of 8% ormore, and we can see that the
(11:15):
company has EPS growth of 105%.
So it certainly passes rulenumber 5A.
Let's move on to rule number 5b.
It says number of EPS increasesin the last 20 years and we're
looking for eight or moreincreases in the EPS earnings
per share, and we can see thatthe company has had 11 increases
(11:37):
in the last 20 years.
So again, it passes rule number5b.
Let's move on to rule number sixaverage dividend growth over
the last 20 years.
And we want to see 8% or morein order for a company to pass
rule number 6.
So you can see it gets 22.9%.
(11:58):
So of course it passes rulenumber 6.
Rule number 7 is the payoutratio.
It's got to be 75% or less, andyou can see that it is 69.23.
So that's very good and thecompany passes rule number seven
.
Let's move on to rule numbereight.
We want to see the debt, thelong-term debt to equity ratio
(12:19):
of 70% or less, and the companyhas currently a long-term debt
to equity ratio of 51%, so we'regood.
It passes rule number eight.
Let's move on to rule numbernine.
This one is checking to makesure that there has not been a
dividend cut recently.
So what we do here is we lookat the current dividend and the
(12:43):
previous year dividend, and sowe can see the dividend has
actually gone up by 33% from theprevious year, so that's good.
So there has been no dividendcut recently.
Share buyback so of course thiscompany is doing share buybacks
.
Again, we look at the number ofoutstanding shares today
compared to the year before, andif we have less outstanding
(13:06):
shares today than the yearbefore, then we know that the
company has done some type ofshare buyback.
So it passes rule number 10.
The rule number 11A is to lookat the PE ratio, and it's got to
be 25 or less, and we can seethat it's sitting right now at
19.54.
So that's good.
Rule number 11b was to comparethe current yield.
(13:30):
We want to make sure it'shigher than the average 20-year
yield, and it is.
So we identify the stock asbeing undervalued or priced low.
So the company passes rulenumber 11b as well.
Rule number 11C is to look atthe PB ratio and we want to make
sure it's three or less, andyou can see that it's currently
(13:52):
sitting at 1.97.
So that is very good.
So the company passes rulenumber 11C as well.
And then, finally, you can seethe SI criteria, which is the 10
criteria we just went throughright Rules number 5 to 11.
Remember, rule number 5 is intwo parts.
Rule number 11 is in threeparts.
(14:12):
So we have a total of 10 SIcriteria and you can see that
the company gets a 10 out of 10because it passes all of the 10
criteria that you can see on thescreen right now.
Now there's a couple of thingswe want to check while we're
here.
Anyway, just because a companypasses all of the criteria and
(14:35):
gets a 10 out of 10, it stillmay or may not be a high quality
company that you may want toinvest in.
So let's look at some of thosethings.
So by default here you can seewe're looking at the average
stock price.
I've set the the length to max,so our data goes back to 1999.
(15:02):
So since then you can see thatthe average stock price has been
pretty much hasn't changed,right, if I was to draw like a
straight line here, right?
What we want to see is a slopethat's increasing over time, and
it really hasn't.
You can see that the stockprice is around $20 today and
(15:23):
that's where it was last yearand even in 2013, 2017, 2005,
2007, 2017, 2005, 2007,.
It's still hovering around $20,right or plus or minus $2.
So between $18 to $22.
And the price has not goneanywhere outside of that range.
(15:47):
So this doesn't look promising.
But let's continue, right,we're going to continue.
So the other thing I want toshow you is the.
Let's look at the dividends pershare.
So now you can see that thedividends per share since 1999,
(16:09):
we see a couple of times wherethe company has cut the dividend
to zero, right?
So this is not a very goodgraph.
You can see that the thecompany cuts the dividend, then
they increase the dividend, thenthey drop the dividend, then
they increase it and then theydrop it again.
So this is very random.
It doesn't give us a high levelof confidence as to what's
(16:33):
going to happen to the dividendin the future.
Now I'm going to give you anexample here.
This is a completely differentcompany, but it is a dividend
stock, but it's a differentindustry, different sector, but
I just want to illustrate to youwhat we look for.
So I'm going to switch over tothis tab, and this is Texas
Instruments.
(16:54):
And, by the way, you can seethe average stock price.
So this graph looks a lotbetter than what we just saw
before for the average stockprice.
So the stock price has beensteadily increasing over the
long term.
But now let's take a look atdividend per share over the long
term.
But now let's take a look atdividend per share.
So this is a nice graph.
(17:16):
Right Since 1999, you can seethat the dividend per share has
been growing.
So this is a nice graph.
This is what we want to see.
We want to see a steadyincrease in the dividend over
time.
But we're not seeing that withour company host hotels.
So again, let's keep going.
(17:38):
It doesn't look promising, butlet's keep going.
So now we're going to look atone more thing, which is the EPS
earnings per share.
So here you can see theearnings per share.
There's a couple of times whereit goes negative, which means
the company lost money in 2002,2003, 2004, 2009.
(17:59):
So you can see a couple ofplaces where it lost money.
Again, what we want to see is anice slope where the earnings
are growing over time, and herethey're not.
Let's jump over to TexasInstruments again.
I'm going to look at the sametype of graph earnings per share
and you can see.
(18:20):
Of course you know there's dipswhere earnings go down, but
then it comes back up againOverall, generally over the long
term.
If you look at the slope ofthis line, it's going up over
time, right?
So this is good because itgives us some degree of
(18:41):
confidence that the company willcontinue to grow its earnings
over time, because they've doneso since 1999.
But when we go back to hosthotels, but when we go back to
host hotels, this graph, thisline, doesn't tell us much.
It's completely random.
So I don't know.
Next year are the earningsgoing to go up, are they going
(19:01):
to go down?
We don't know.
And the same thing with thedividend per share.
Is the company going to pay adividend next year?
We don't know.
Is the dividend going to go up,it's going to go down?
We don't know.
Is the dividend going to go up,it's going to go down?
We don't know.
That's hard to predict.
Whereas if we go back to TexasInstruments, we look at
dividends per share, we can havesome degree of confidence that
(19:24):
the company will at least pay usa dividend next year and
hopefully grow the dividend aswell, because it is on an
incline.
Because it is on an incline Nowthat we've checked the 10 SI
criteria score in the platform,we can see that the company gets
a 10 out of 10.
We don't want to forget aboutrules number 1 to 4 and rule
(19:46):
number 12.
So let's look at those rightnow.
So rule number 1, do youunderstand how the company is
making money?
And in this case we do.
The company is called HostHotels and Resorts.
They're making money by rentingout rooms in their hotel and
resorts, and that's how thecompany earns revenue.
On rule number two 20 yearsfrom now will people still need
(20:10):
its product and services?
And I'm going to say yes,hotels have been around for a
very long time.
Same thing with resorts.
And 20 years from now, ofcourse, I think people will
still be going on vacation,traveling to places, visiting
family and friends, and so theywill need places to stay.
(20:31):
So hotels sure would still bein demand of some type in the
next 20 years.
So I'm going to say, for now,the company passes rule number
one passes rule number two.
Rule number three does thecompany have a low cost
competitive advantage?
So this is a tricky one becausetypically the companies that
(20:54):
pass rule number three areabsolute giants in their
industry, and these are bluechip stocks, something like
Coca-Cola, walmart, mcdonald's.
These are very, very largecompanies, well-established, and
they have household names.
Now, I know this company here.
(21:16):
They do have hotels under theMarriott brand, under the Westin
brand and a couple of othernames that you might be familiar
with.
So in a way, sure that's a goodcompetitive advantage.
In a way, sure that's a goodcompetitive advantage.
But in terms of size, thecompany is fairly small.
Right, we looked at it earlier163 employees and a market cap
(21:40):
of $14 billion.
There are companies out therewith a market cap of hundreds of
billions of dollars and 30, 40,50, 100,000 employees or more,
right, so much much largercompanies that can take
advantage of economies of scale.
So I'm kind of on the fenceright now.
(22:00):
I'm not sure if the companypasses rule number three, but
I'm going to give the companythe benefit of the doubt and for
now we'll say it passes rulenumber three.
Three, and let's move on to rulenumber four.
Is the company recession proofand in my opinion, it's not,
(22:22):
because we've seen what happenedduring COVID to hotels.
We saw what happened during9-11, when people stopped
traveling, getting on planes,staying at hotels, and so when
there is a recession or there'sa chance you may lose your job,
(22:43):
you're probably not going totravel overseas or on expensive
trips and you're not going to bestaying in hotels right, and
you're not going to be stayingin hotels, right, and we saw
that especially during COVID-19,when a lot of people stopped
traveling, couldn't travel, andeven for business travel, a lot
(23:04):
of the meetings were being heldonline.
So, in my opinion, the companyfails rule number four and I
would say that it is notrecession proof.
Now rules number five to 11,we've already covered in the
Simply Investing platform, soI'm going to move on.
We saw that it passed all ofthose rules, and rule number 12,
(23:26):
of course, is to keep youremotions out of investing, and
we talk a lot about this in theSimply Investing course and how
to actually accomplish that.
Okay, so to finish off thissection here, in this episode,
the company passes 11 out of the12 Simply Investing rules,
(23:50):
right, as we saw, it did notpass rule number four, where
we're looking for companies thatare recession proof Now.
Is the company still worthconsidering?
Maybe, maybe not.
We're going to take a look atthe historical rate of return.
Maybe that will help us makeour decision.
(24:11):
So for this I'm going to goback to 2004 and to 2024.
So we're going to cover a20-year period.
So we want to cover a longperiod of time because it takes
into consideration the ups anddowns of the stock market.
So when we have a bull marketor we have a bear market, right
(24:33):
if the market's down, themarket's up, or there's a
recession or a downturn, in thelast 20 years we've experienced
all of those things.
So any company that can survivethose last 20 years and come
out at the top might be worthconsidering.
So we're going to look at thelast 20 years and see how well
(24:56):
our company, host Hotel andResorts, has done so.
In this example I'm going to usean investment of $10,000.
So let's say, in 2004, youinvested $10,000 into this
company, host Hotel and Resorts,and, of course, the time frame
is 20 years.
The ending value so what we'redoing is we're looking at the
(25:20):
stock price today as of thisrecording, plus we're adding up
all of the dividends receivedover the last 20 years, the
investment would be worth todayover $26,000.
So that's pretty good.
The rate of return is 161%.
(25:43):
So how do we know if this is agood return?
Is it a decent return?
Is it mediocre?
Is it not that great?
Because just looking at thenumber seems like it's fine, but
how do we know if it's good orbad?
So what I'm going to do hereand again is just to illustrate
(26:03):
this example.
I'm going to compare it toanother company and again, this
company is not in the sameindustry, it's not in the same
sector, but it is a dividendstock, and I just want to
illustrate to you of what'spossible when it comes to
investing in dividend stocks.
So it's going to be the samecompany we looked at in the
(26:24):
Simply Investing platform, whichwas Texas Instruments, right?
So I'm going to show that up onthe screen in just a second.
There was one other number Iwanted to show you here, which
was the dividend yield on cost,which is the dividend yield
based on the original purchaseprice back in 2004 for host
hotels and resorts, and you cansee that today it is 6.18
(26:48):
percent.
So that is the return on yourinvestment while you hold on to
these shares.
So if you still hold on to them, you can expect this year to
earn 6.18% of $10,000, becauseit's based on your original
investment in dividends.
And remember, dividends aredeposited automatically into
(27:11):
your trading account as cash,and so you can spend that money
if you wish, or you can reinvestit.
Okay.
So now that we have all the datafor host hotels and resorts, I
want to compare it to TexasInstruments Again.
I know it's not in the sameindustry.
It's just to illustrate what'spossible with dividend stocks.
Illustrate what's possible withdividend stocks.
(27:38):
So, texas Instruments sameamount $10,000 invested back in
2004.
So the same 20 year period thatinvestment would be worth today
over $106,000.
You can see the numbers up onthe screen here.
That is a rate of return of961%, versus host hotels and
resorts, which returned us 161%.
(27:58):
So that is a huge difference inthe rate of return.
And more important to us asdividend investors is the
dividend yield on cost.
Texas Instruments today, inthis example, would provide you
with over 26% annually individends, and that's 26% of
(28:20):
$10,000, and and dividends wouldbe returned to you just for
holding on to those shares.
So if we were to just to lookat the numbers on the screen
here.
Texas Instruments would havebeen a better investment than
host hotels and resorts.
So why are we looking at thepast?
(28:40):
The reason is we cannot predictthe future.
We don't know how thesecompanies are going to do in the
future.
We don't know if they're goingto pay a dividend.
Predict the future we don'tknow how these companies are
going to do in the future.
We don't know if they're goingto pay a dividend in the future.
So what we do is we can look atthe historical rate of return
over the last 20 years, which isa long period of time, and that
can give us some level ofconfidence as to what to expect
(29:02):
in the next 5, 10, 15, or 20years of holding on to these
companies.
So what is the conclusion here?
So the conclusion is a coupleof things.
I want to go through them allwith you right now.
If you are a brand new dividendinvestor and you're looking to
get started building a dividendstock portfolio you don't own
(29:26):
any other stocks building adividend stock portfolio, you
don't own any other stocks thenin this case, I would skip host
hotels and resorts and move onto something else.
Why?
Because the company passes 11out of the 12 rules of simply
investing.
And remember what I said at thebeginning of the video we only
want to invest in companies whenthey pass all of the 12 rules.
(29:48):
If there's even one failure, weskip it, move on to something
else.
Why do we do that?
Because we want to minimize ourrisk to our hard-earned money.
So for any new investors, Iwould skip it.
That's what, in my opinion,that's what I would do Now.
When we took a look at theearnings per share growth, you
(30:10):
could see that it was erratic.
Since 1999, the earnings havebeen erratic.
They're not going up steadilylike we like to see, so that's
kind of that's a negative right.
I know the company passed allof the 10 SI criteria and got a
10 out of 10.
But still, if I look at theearnings EPS graph, it's erratic
(30:34):
.
So to me that's a bit of aminus right Sort of a yellow
flag there.
If we look at the dividendgrowth, also it was erratic,
right.
The company had not paid adividend for a couple of years.
Then it started up again, thenit decreased the dividend, then
it paid another dividend.
So it was just random.
(30:55):
And again we want to see a nicesteady graph where it just goes
up, and this company didn't dothat right, so that's a negative
there too.
Then, when we took a look at thehistorical rate of return, 161%
return over 20 years is notthat great compared to Texas
Instruments, which had a returnof over 961% during the same
(31:20):
period.
So the rate of return not thatgreat.
And also the company is small.
They've got 163 employees, capof 14 billion.
Like I said, generally when welook at companies, they're very
large in the hundreds ofbillions of dollars market cap
(31:40):
and 30, 40, 50, 000, 100, 000employees more, and so they are
much, much, much largercompanies and especially when
you're starting to invest individend investing, we want to
start off with the large,well-established blue chip
companies first and foremost,before you start looking at
(32:04):
other smaller companies in thespace.
Now, if you already have awell-diversified dividend
portfolio, you've got a lot ofexperience, you've been
collecting dividends for many,many, many years and you are now
looking to diversify yourportfolio and you don't have any
(32:26):
hotels or REITs in yourportfolio, then you may consider
this company that we're lookingat today and even then I would
suggest, if you don't have anyother hotel stocks or don't have
any other REITs again, I wouldsuggest that you look at the
(32:48):
bigger companies first and ifthey're not passing the 12 rules
of Simply Investing, then thebest thing to do is to wait.
There is no harm in waiting.
We always want to pick up highquality stocks, and you can only
pick up high quality stocks iswhen they pass all of the 12
(33:11):
rules of simply investing.
Okay, so that's a lot ofinformation there.
I hope that's going to help youto make a good, solid decision.
Does this mean that you shouldgo out and buy any stock today
that pays a dividend?
And the short answer is no.
(33:31):
Our approach to investing is toinvest in quality, dividend
paying stocks when they arepriced low, and the key words
here are quality stocks, notjust any stock.
It's got to be a dividendpaying stock and not just at any
price.
It should be priced low orundervalued.
How do you know, when you'relooking at a stock, if it's a
(33:52):
quality stock and if it's pricedlow?
So to help you with that, I'vecreated what I call the 12 rules
of simply investing, and we'vecovered all of the rules in
today's episode, so you can seethem up on the screen again, but
I'm not going to go throughthem again because we've just
covered them a couple of minutesago, at the beginning of this
episode.
(34:12):
So, for those of you that areinterested, I've created the
Simply Investing course.
It is an online self-pacedcourse.
It's in 10 modules.
Module 1 covers the investingbasics.
Module 2 covers the 12 rules ofSimply Investing.
Module three shows you how toapply the 12 rules.
Module four shows you theSimply Investing platform and we
(34:35):
took a quick look at it intoday's episode.
Module five placing your firststock order.
Module six building andtracking your portfolio.
Module seven when to sell astock, which is just as
important as to know when to buy.
Module 8, how to reduce yourfees and risk, especially if you
have mutual funds, index fundsand ETFs.
(34:58):
Module 9 is your action plan toget started right away.
And module 10, I answer yourmost frequently asked questions.
And module 10, I answer yourmost frequently asked questions
and, of course, we showed youthe Simply Investing platform in
today's episode.
The platform applies the 10 SIcriteria to over 6,000 companies
(35:19):
in the US and in Canada everysingle day.
So you'll know very quickly ifthis is a stock you should
consider investing in or if thisis a stock.
You should skip or avoid fornow.
So if you're interested, youmay want to write down the
coupon code SAVE10.
It'll save you 10% off of thecourse or the Simply Investing
(35:43):
platform as well.
If you enjoyed today's episode,be sure to hit the subscribe
button.
Hit the like button as well.
We have a new episode out everyweek and for more information,
take a look at our website,simplyinvestingcom.
Thanks for watching.
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