For a favorite speculative pick for 2022, I want to focus on a stock I think would be a perfect fit for those of you looking to build up a nest egg that will provide income when you need it, suggests Jason Williams, managing editor for Wealth Daily.
It’s a little speculative because of current conditions, but it’s almost guaranteed to perk back up and deliver solid gains and steady payouts for decades to come. It’s Park Hotels & Resorts (PK), and it’s a real estate investment trust. I know what you’re thinking. REITs aren’t speculative. But this one kind of is.
It’s a hotel owner and people are having some trouble traveling be it due to fear of infection, government restrictions, or just canceled flights. That’s leading to some trouble with its tenant operators. And that also led it to suspend its dividend payment back in early 2020.
But the management team has been busy cleaning up the balance sheet and strengthening the company’s financial position ever since the pandemic struck. They’ve refinanced debt at lower levels with longer times to maturity. They’ve sold off underperforming assets.
Now, the company’s months away from hitting a breakeven point. After that, it won’t be long before those dividends are reinstated. And if they come back where they left off (which is a good bet), they’ll deliver a double-digit yield to investors who buy at current levels (around $20).
Shares could also easily get back to pre-pandemic levels in the mid-$30’s. That’s good for a 75% gain from here and could only be the start. Park has a quality portfolio of luxury resorts in desirable locations.
It’s pretty much a sure thing people will want to stay at its hotels when they’re ready to get back out there again. So a $40 share price (100% upside from recent levels) isn’t out of the question at all. Plus, with those steady payments (once they come back), you’ll be adding more than 10% a year in dividends, too.
