RLJ Lodging Trust Stock Upgraded (RLJ)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- RLJ Lodging (NYSE: RLJ) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues rose by 17.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 28.96%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, although almost any stock can fall in a broad market decline, RLJ should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • RLJ LODGING TRUST reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, RLJ LODGING TRUST turned its bottom line around by earning $0.39 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.76 versus $0.39).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 230.4% when compared to the same quarter one year prior, rising from -$6.51 million to $8.49 million.
  • Net operating cash flow has significantly increased by 225.06% to $34.03 million when compared to the same quarter last year. In addition, RLJ LODGING TRUST has also vastly surpassed the industry average cash flow growth rate of 20.50%.
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RLJ Lodging Trust is an independent equity real estate investment trust. The firm also manages real estate funds. It invests in the real estate markets of the United States. The firm primarily invests in premium-branded, focused service, and compact full-service hotels. The company has a P/E ratio of 44.1, above the S&P 500 P/E ratio of 17.7. RLJ has a market cap of $2.79 billion and is part of the financial sector and real estate industry. Shares are up 19.9% year to date as of the close of trading on Friday.

You can view the full RLJ Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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