Core Viewpoint - The article discusses the current investment landscape, highlighting the appeal of treasury bonds yielding 4-5% while suggesting that investors may be missing out on equity market opportunities. It presents two investment picks, Chatham Lodging Trust and Capital Southwest, both offering yields above 8% and attractive valuations [2][12]. Chatham Lodging Trust (CLDT) - Chatham Lodging Trust is a self-managed REIT focused on upscale, extended-stay hotels, with 38 properties totaling 5,735 rooms across 16 U.S. states and Washington D.C. [3] - CLDT has a strong EBITDA margin of 35.8%, the second highest among its peers, benefiting from lower operating costs and a focus on cost control [3][4]. - The company has shown resilience post-pandemic, with a record high average daily room rate of $182 in May, surpassing both 2019 and the previous year [4]. - In Q1 2024, CLDT's RevPAR increased by 2% YoY, and free cash flow grew by 10% YoY, driven by strong performance in tech regions [5]. - Management projects a 3.25% RevPAR growth for Q2, supported by strong corporate demand from major clients [5]. - CLDT has a leverage ratio of net debt to EBITDA of 4x, well below the 6x threshold considered safe for REITs, and $382 million in liquidity [5]. - The stock is priced at $8.49 with a forward P/FFO of 7.95, and the preferred stock (CLDT.PR.A) offers an 8.0% yield at a 17% discount to par value [5][12]. Capital Southwest (CSWC) - Capital Southwest is a self-managed BDC with a strong track record of value creation and efficient cost structure, outperforming peers like Main Street Capital and Hercules Capital [6][10]. - CSWC has produced a total return of 406% over the past 10 years, significantly surpassing the S&P 500 and BDC Income ETF [6]. - The portfolio is conservatively managed, with 89% allocated to first-lien secured debt, benefiting from higher interest rates due to 97% of interest-bearing investments being at floating rates [7][9]. - CSWC's operating expenses have decreased to 1.7% of total assets, reflecting improved operational efficiencies [8]. - The company has a strong balance sheet with a debt-to-equity ratio of 0.82x, well below the industry average [10]. - CSWC currently yields 8.5%, with a well-covered regular dividend supported by a 119% NII-to-Dividend ratio [10][12]. - The stock is priced at $26.85 with a Price-to-NAV of 1.6x, which is lower than its peers, indicating relative undervaluation [10][11].

Core Viewpoint - Chatham Lodging Trust is currently one of the weakest-performing REITs in 2024, with an 18% negative return, significantly underperforming the benchmark Vanguard Real Estate Index Fund ETF's 5% drop. Despite this, the company is considered cheap with a cap rate of 10.3% and strong operating performance, although there are concerns regarding revenue growth drivers and high debt costs [2][12]. Company Overview - Chatham Lodging Trust is a lodging REIT that focuses on extended-stay accommodations and premium-branded select-service hotels, with extended stay rooms making up approximately 63% of its 5,883 rooms across 39 hotels [3]. - The company operates in 17 states and D.C., with California representing about 28% of its last twelve-month EBITDA. Residence Inn contributes 46% to the last twelve-month EBITDA [4]. Operational Overview - In an ad-hoc business update for April and May 2024, Chatham Lodging reported a 5% year-over-year increase in revenue per available room (RevPAR), significantly higher than the 1.5% growth in Q1 2024. This increase was primarily driven by higher occupancy rates of 83% and 82% in April and May, respectively [4]. - The company’s Q1 2024 adjusted FFO was $0.16 per share, flat year-over-year, with revenue growth offset by increased interest and operating expenses. For reference, adjusted FFO was $1.18 per share in 2023 [4]. 2024 Outlook - Chatham Lodging initially guided for a 2.5-4% RevPAR increase in Q2 2024, but the latest update suggests the REIT will exceed this guidance, indicating a solid year of RevPAR growth ahead. RevPAR grew 2.5% in 2023 [5]. Capital Structure - As of Q1 2024, Chatham Lodging had net debt of $412 million, which increased to about $450 million in Q2 due to the acquisition of Home2 Suites by Hilton Phoenix Downtown for $43 million. Net debt accounts for 45% of enterprise value, while preferred equity constitutes 12% of the capital structure [6]. - The company plans to address July 2024 maturities with an additional $140 million borrowing at an interest rate of about 7%, which will create a headwind due to high fixed rates on expiring debt [7]. Market-Implied Cap Rate - Chatham Lodging is estimated to generate about $104 million in net operating income on a run-rate basis, reflecting a market-implied cap rate of 10.3% relative to its $1 billion enterprise value. The capital investment budget for 2024 is $37 million, leading to a post-capex cap rate of 6.7% [8]. Series A Preferred Shares - The Series A preferred shares currently offer a 7.8% yield, which is attractive despite being 2.5% below the NOI the company trades at. The preferred shares are valued at about $102 million, indicating they are well-covered by common equity market capitalization [10].

9. Earnings Per Share 13 From time to time, the Company may award restricted shares under the Equity Incentive Plan as compensation to officers, employees and non-employee trustees. The Company recognizes compensation expense for the restricted shares on a straight-line basis over the vesting period based on the fair market value of the shares on the date of issuance. 14 | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------|------------------------------------------- ...

Chatham Lodging Trust (NYSE:CLDT) Q1 2024 Earnings Call Transcript May 6, 2024 10:30 AM ET Company Participants Chris Daly - DG Public Relations Jeffrey Fisher - Chairman, President, CEO Dennis Craven - EVP & COO Jeremy Wegner - CFO & SVP Conference Call Participants Ari Klein - BMO Capital Markets Bryan Maher - B Riley Securities Operator Greetings. Welcome to Chatham Lodging Trust First Quarter 2024 Financial Results. At this time, all participants are in listen-only mode. A question-and-answer session wi ...

For the quarter ended March 2024, Chatham Lodging (CLDT) reported revenue of $68.44 million, up 1.2% over the same period last year. EPS came in at $0.16, compared to -$0.14 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $68.79 million, representing a surprise of -0.50%. The company delivered an EPS surprise of +23.08%, with the consensus EPS estimate being $0.13.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ...

Chatham Lodging Trust Announces First Quarter 2024 Results • Portfolio Revenue Per Available Room (RevPAR) – Increased 2 percent to $120 compared to the 2023 first quarter. Average daily rate (ADR) accelerated 1 percent to $171, and occupancy jumped 1 percent to 70 percent for the 38 hotels owned as of March 31, 2024. ◦ RevPAR for the Silicon Valley and Bellevue hotels was up 17 percent over the 2023 first quarter. ◦ April 2024 RevPAR was up 5 percent over 2023 for the entire portfolio. • Net Income / (Loss ...

Chatham Lodging (CLDT) came out with quarterly funds from operations (FFO) of $0.16 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to FFO of $0.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 23.08%. A quarter ago, it was expected that this real estate investment trust would post FFO of $0.15 per share when it actually produced FFO of $0.19, delivering a surprise of 26.67%.Over the last four qu ...

WEST PALM BEACH, Fla.--(BUSINESS WIRE)--Chatham Lodging Trust (NYSE: CLDT), a lodging real estate investment trust (REIT) that invests in upscale, extended-stay hotels and premium-branded, select-service hotels and owns 38 hotels, today announced that its board of trustees declared a quarterly common share dividend of $0.07 per common share, as well as a quarterly preferred share dividend of $0.41406 per preferred share, payable on April 15, 2024, to shareholders of record as of March 28, 2024. About Chath ...

Chatham Lodging Trust (NYSE:CLDT) Q4 2023 Earnings Conference Call February 27, 2024 11:00 AM ET Company Participants Chris Daly - DG Public Relations Jeffrey Fisher - Chairman, President, CEO Jeremy Wegner - CFO & SVP Dennis Craven - EVP & COO Conference Call Participants Anthony Powell - Barclays Capital Operator Greetings, welcome to Chatham Lodging Trust Fourth Quarter 2023 Financial Results Conference Call. [Operator Instructions]. Please note this conference is being recorded. I will now turn the call ...

Chatham Lodging (CLDT) reported $72.28 million in revenue for the quarter ended December 2023, representing a year-over-year increase of 2.8%. EPS of $0.19 for the same period compares to -$0.08 a year ago.The reported revenue represents a surprise of +2.59% over the Zacks Consensus Estimate of $70.46 million. With the consensus EPS estimate being $0.15, the EPS surprise was +26.67%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to d ...