Hotel Properties Limited Is Valued At Its Book Value: Here Are 3 Things Investors Should Know Now

Hotel Properties Limited (SGX: H15) is a company that owns, operates, and manages hotels. It also develops and invests in properties.

Some of the hotels and properties in the company’s portfolio include resorts in Maldives under the Four Seasons Resorts brand and Forum the Shopping Mall in Singapore.

Hotel Properties could be a property company that would attract investors now since it is priced at just 1 times book value at its current share price of S$3.43. Here are three things about the company’s business investors may want to know about:

1. The company has a diversified income base

The table below shows the geographical sources of Hotel Properties’ revenue in 2015.

Source: Hotel Properties 2015 annual report

As you can see, the company’s revenue is diversified across a number of geographical regions. This diversification helps reduce geography-related risks, though the company is still exposed to industry risk.

2. The company has a history of growing its dividend

Hotel properties is a company that has been paying an annual dividend since at least 2002.

Source: Hotel Properties website

It’s worth noting too that the company’s dividend has climbed steadily over time, starting in 2002 at 2.5 cents and ending at 8 cents in 2015.

3. The company is managed by its major shareholder

As of 21 March 2016, Hotel Properties’ managing director Ong Beng Seng controls 77.74% of the company’s shares.

When a company is managed by a shareholder with a controlling stake, there are pros and cons. If management also owns a significant stake in a company, there is incentive for management to focus on sustainable long-term growth instead of banking on unsustainable short-term gains.

But, it will also be difficult for a company’s minority shareholders to remove management if incompetence and/or integrity issues surface.

It is important that investors who want to invest in Hotel Properties are happy with Ong at the helm.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.