Income is a big part of investors' returns. Stocks, mutual funds and fixed income ideas in this column are featured because they are relatively solid in their ability to pay dividends or interest. We're giving income investors a resource to start their research for investments that give better yields with lower risk.

Like most businesses, hospitality was hit hard the last 2 years. For HPT, that meant revenues went from $1.285 billion in 2007 to $1.25 billion to $1.037 billion in 2009. Earnings were hit initially, going from $2.16 in 2007 to $1.11 in 2008, but then they rebounded to $1.51. What's interesting is that analysts see sales increasing slightly this year to $1.04 billion but earnings continuing to decrease to $1.30 this year, then up to $1.40 next year.

Strangely enough, the dividend didn't follow suit going from $2.94 in 2006 to $3.03 to $3.08 before hitting the wall. In 2009, total payout was 77 cents, done in the first quarter, then gone. Now the dividend is scheduled for 45 cents a quarter or an annual payout of $1.80, for a yield of 7%. If the economy is indeed gaining positive traction, then the pay out will only go higher.

There's still some question as to whether HPT is out of the woods. One measure of sales is called Revenue Per Available Room (RevPAR). In the fourth quarter of last year, RevPAR was down 16.6% compared to the same period in 2008. Simply put, there were lots of empty rooms, in every aspect of the business, from regions to hotel type to price points. Occupancy continues to be troubling. In a recent release, it was 62%. Competition from lower priced hotels is taking business, as are higher priced hotels discounting rooms to attract more travelers. HPT's sweet (suite?) spot is the mid-priced customer.

So why buy this stock now? Because it looks like things have hit bottom for the hospitality sector. And it seems probable that 2011 will see a much awaited improvement. Of course, if some extraordinary event stalls the recovery, don't expect business travelers to hit the road or vacationers. We all witnessed the complete halt of movement after 9/11. And management has shown it will stop the dividend as needed in order to conserve capital.

On the other hand, when things are good at HPT, they are very good. The dividend in 2008 of $3.08 is a fond memory. Can the company recapture that generosity? Not for a while. But management can increase the pay out just as easily as cut it. And when RevPAR improves, so will the dividend.

More numbers: Market Cap is $3.26 billion. Trailing P/E is 17.5 while Forward P/E is 19. Price to sales is 3.03 while Price to book is 1.10. Book value is $23. Operating margin for the last 12 months was 28.03% while Profit margin was 18.64%. Return on equity was 6.76% and Return on assets was 3.27%. There's $130.4 million in the bank for $1.00 a share. Total debt is $2.19 billion or 42% of capital. Current ratio is 2. The stock has rebounded nicely in the last year, going from a low of $8.50 to a high of $26.48 on the day of this writing. There are 123.38 million shares outstanding with a Float of 122.95 million. Institutions hold 85% of the stock.

Income investors will look hungrily at this well paying stock but beware. History shows that when times are good, so are the pay outs. When they're bad, there's nothing.

- Company Web site: www.hptreit.com