5 High Yield Dividend Stocks to Buy According to Billionaire David Harding

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

No. of Hedge Fund Holders: 13
Dividend Yield: 8.27%

It is one of the top lodging REITs, and it boasts of an extensive portfolio of resorts and hotels. The portfolio includes 60 premium resorts and hotels with more than 33,000 rooms in the city center. Of 13 hedge funds holding this stock includes Citadel Investment Group, which had more than 1.6 million shares in Park hotels & resorts Inc.

Citadel Investment Group had more than 1.6 million shares of the company, making it the biggest hedge fund investor in this company.

The hotel industry has been gradually recovering from the pandemic impact. However, the company might not be as solvent as expected, a situation that could turn problematic in the future. The recovery will be slow considering the pandemic’s extended presence. Individuals and businesses have therefore been exercising caution by traveling less.

The REIT reported a 96% decline in its Q2 revenue, raising concerns about its financial instability. If the pandemic continues for an extended duration of time, the hotel industry might be severely affected. Many hotels might not be able to restart their operations, and employees will lose their jobs.

 This is what Mason Hawkins said about Park Hotels & Resorts:

“Park Hotels and Resorts (-68%, -2.82%), was another top detractor. Park saw its occupancy levels hit unprecedented lows due to travel reduction and conference cancellations as a result of COVID-19. Park responded by closing all or parts of the majority of its owned hotels. We have evaluated the company’s debt (the next maturity is $700 million at the end of 2021) and liquidity (about $1.4 billion) and believe it will survive the crisis. CEO Tom Baltimore purchased shares personally after the stock’s sharp decline but still well above where it trades. The stock was deeply discounted at quarter end, but our appraisal of the value has declined with the loss of cash-flow. As we said above, it is in the third bucket, and we did not add during the quarter. Park trades at an extremely wide discount to both relatively stable replacement cost (it trades at less than 20% of that metric) and a fast moving value, providing a large margin of safety at today’s low price.”