10 Extreme Dividend Stocks With Upside Potential

3. Park Hotels & Resorts Inc. (NYSE:PK)

Upside Potential as of August 14: 37.6%

Dividend Yield as of August 14: 7.19%

Park Hotels & Resorts Inc. (NYSE:PK) is an American real estate investment trust company that mainly invests in hotel properties. The company encountered some difficulties in its business travel segment during the pandemic, but the latest quarterly earnings reveal encouraging results. The company has seen growing demand as business travel picks up and group demand remains strong, particularly at its resort hotels and certain urban locations. In fact, comparable group revenues for the second quarter of 2024 rose by nearly 8% compared to the previous year. The stock delivered a nearly 12% return in the past 12 months.

Seeing strong momentum in its different segments, Park Hotels & Resorts Inc. (NYSE:PK) is also moving forward with capital investments. Looking ahead, the company has outlined its plans for capital investments in 2024, projecting expenditures between $270 million and $290 million. Of this amount, $51 million was allocated during the second quarter of the year. The company is focusing on several key renovation and return-on-investment projects.

Vulcan Value Partners also highlighted the company’s business in its Q4 2023 investor letter. Here is what the firm has to say:

“Park Hotels & Resorts Inc. (NYSE:PK) is a real estate investment trust (REIT) that owns a number of Hilton’s flagship properties including the Hilton Hawaiian Village and the New York Hilton. The company reported a solid quarter. Importantly, the company decided in June to return its two large hotels in San Francisco to the debt holders, and in October, they were placed into court-ordered receivership. The process has now reached a point where the company no longer has any financial obligation to these properties. As a result, the company’s balance sheet has been strengthened. The company also repurchased 3% of shares outstanding and announced its intention to pay a special dividend in the fourth quarter. We are pleased that the market has begun to appreciate the value of Park Hotels, and we think its shares remain discounted.”

Park Hotels & Resorts Inc. (NYSE:PK) has been distributing dividends to shareholders since it spun off from Hilton Worldwide in 2017, although it temporarily halted payments for nearly two years in 2020 due to the pandemic. currently, it offers a quarterly dividend of $0.25 per share, having raised it by 67% in February this year. The company aims for a payout ratio between 65% and 70% of Adjusted FFO per share for the entire year. According to the company’s current guidance, this strategy suggests an additional top-off dividend will be declared in the fourth quarter of 2024. With a dividend yield of 7.2% as of August 14, PK is one of the best dividend stocks on our list.