Xenia Hotels & Resorts operates high-quality luxury and upper-scale hotels in the United States.

The company's renovations in 2018 will help it to continue to improve its RevPAR in the long term.

Its business operations heavily depend on the strength of the overall economy.

Xenia offers a 5.9%-yielding dividend.

Investment Thesis

Xenia Hotels & Resorts (XHR) operates high-quality and geographically diversified hotels in the United States. Its development projects should help Xenia to drive long-term revenue growth. The company is also in the midst of completing its renovation projects. Once completed, it should be able to enjoy better daily rates and attract more customers. However, the performance of Xenia’s business is highly dependent on the strength of the economy. Despite its valuation discount, we think investors should wait until the initial stage of the next economic cycle to invest.