Investopedia: Should Investors Pull Over For TravelCenters Of America?

Selling gas and diesel is an intrinsically low-margin business - which probably explains why so many major integrated oil companies like Exxon Mobil (NYSE:XOM) and BP (NYSE:BP) sold out of the business years ago, and why companies like Kroger (NYSE:KR) and Walmart (NYSE:WMT) use fuel sales more like promotions and loss leaders.

That doesn't bode well for TravelCenters of America (AMEX:TA), one of the largest operators of travel centers (or truck stops, if you prefer) in the United States. While fuel resale is always going to be a difficult, low-margin business, EBITDAR and site-level operating expense improvement suggests that a better multiple could be in order for this stock.

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REITs With Yield And Upside

As a general rule, there are only two common reasons to own real estate investment trust (REIT) shares - the normally above-average yields that these companies pay and the diversification benefits of incorporating real estate into a portfolio. In some cases, though, REITs can also provide above-average capital appreciation for risk-tolerant investors willing to buy in when things still look difficult. 

Although the REIT sector has generally recovered since the worst of the fall of 2008 and spring of 2009, the recovery seems to have flattened out this year. Does that mean it is time for investors to consider this sector again, or is the uncertain state of the economy an argument for waiting a little longer?

Hospitality Properties Trust (NYSE:HPT)
With a healthy-looking 8% yield, this owner of hotels and travel centers (truck stops) would seem to be another way to play the eventual recovery in economic activity, particularly business and leisure travel. Unfortunately, the mid-priced travel industry is still taking its licks and operators like Marriott (NYSE:MAR) continue to struggle to fill rooms. Overcapacity in the hotel space and an inability of operators to meet minimum rent thresholds are certainly threats to the dividend, but risk-tolerant investors might look to this idea as a double play on both income and economic recovery. 

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