Generating $100/Month in Passive Income from Xenia Hotels & Resorts (XHR): A Dividend Yield Strategy Analysis

In the pursuit of passive income, dividend-paying stocks remain a cornerstone of income-focused portfolios. Xenia Hotels & Resorts (NYSE: XHR), a real estate investment trust (REIT) specializing in the hospitality sector, has emerged as a compelling candidate for investors seeking regular cash flow. As of November 2025, XHR's forward dividend yield of approximately 4.05% to 4.12% positions it as a high-yield option, but its financial performance and capital requirements warrant closer scrutiny. This analysis explores the feasibility of generating $100/month in passive income from XHR, balancing its dividend strategy with the capital needed to achieve this goal.

The Dividend Yield Strategy

Xenia Hotels & Resorts has maintained a consistent quarterly dividend of $0.14 per share, resulting in an annualized payout of $0.56 per share this translates to a forward dividend yield of roughly 4.05% to 4.12%, assuming a stock price that has risen 9% over the past month this yield exceeds the average for REITs.

To generate $100/month in passive income, an investor would need to earn $1,200 annually. Using XHR's forward yield of 4.08% (the midpoint of the 4.05%-4.12% range), the required investment would be approximately $29,411 ($1,200 ÷ 0.0408). This calculation assumes the dividend remains stable and the stock price does not fluctuate significantly. However, XHR's recent financial performance introduces volatility into this equation.

Capital Requirements and Financial Realities

While the dividend yield appears attractive, XHR's underlying financials are mixed. In Q3 2025, the company reported a net loss of $13.7 million ($0.14 per share) but offset this with year-to-date net income of $57.0 million ($0.57 per share), driven by gains on property sales and improved hotel operating income. This duality highlights the importance of evaluating both short-term challenges and long-term sustainability.

Xenia's liquidity position is robust, with $188 million in cash and $688 million in total liquidity this supports its ability to maintain dividends. However, its debt load of $1.4 billion and projected earnings decline of 61.9% over the next three years raise concerns about future sustainability. Investors must weigh these risks against the immediate appeal of its yield.

Risk Considerations

The hospitality sector is inherently cyclical, and XHR's exposure to hotel operations makes it vulnerable to shifts in demand, interest rates, and economic conditions. For instance, a 9% increase in its stock price over the past month may reflect optimism about its dividend policy, but this optimism could wane if broader economic conditions deteriorate. Additionally, XHR's debt-to-equity ratio of 1.17 suggests leverage that could amplify losses during downturns.

Conclusion

Xenia Hotels & Resorts offers a compelling dividend yield for income-focused investors, but its financial profile demands a nuanced approach. To generate $100/month in passive income, an investor would need approximately $29,400 in capital, assuming the current yield holds. However, this strategy hinges on XHR's ability to sustain its dividend amid mixed quarterly results and a challenging macroeconomic environment. Diversification and a long-term perspective are critical, as the REIT's high yield comes with inherent risks tied to its debt load and sector volatility.

For those willing to accept these risks, XHR's commitment to shareholder returns-evidenced by its consistent quarterly payouts and strong liquidity-makes it a viable, albeit cautious, addition to a passive income portfolio.