BRAEMAR HOTELS & RESORTS DECLARES DIVIDENDS FOR THE FIRST QUARTER OF 2024
- Announcement of quarterly cash dividends for common stock and various series of preferred stock
- Annual rate of $0.20 per share for common stock
- Focus on luxury hotel and resort investments
- None.
Insights
The declaration of dividends by Braemar Hotels & Resorts Inc. signals the company's current financial stability and its commitment to returning value to shareholders. The distribution of cash dividends is often indicative of a company's confidence in its ongoing cash flows and profitability. In this case, the dividends across different share classes, including common and preferred stock, suggest a stratified approach to shareholder returns, catering to different investor preferences and risk profiles.
From a financial analysis perspective, the annual dividend rate of $0.20 per common share provides a yield that investors will compare against industry benchmarks and alternative investment opportunities. The yield must be competitive to attract and retain investors, especially in the luxury hotel and resort sector, which can be sensitive to economic cycles. The dividends for preferred stocks, which are typically higher than those for common stock due to their preferential treatment in dividend payments and liquidation, are in line with the company's capital structure strategy and the higher risk premium associated with the hospitality industry.
Investors will also evaluate the sustainability of these dividends by looking at the company's payout ratio, cash reserves and earnings projections. A consistent dividend policy can enhance the company's reputation among investors, potentially influencing its stock price positively. However, it is crucial to monitor the company's future earnings and cash flow statements to ensure that the dividend payments do not compromise its growth potential or necessary capital expenditures.
The luxury hotel and resort industry, in which Braemar Hotels & Resorts operates, is highly competitive and subject to macroeconomic factors such as disposable income levels, travel trends and global economic health. As such, the announcement of dividends should be viewed within the broader context of the industry's performance and outlook.
Market research indicates that luxury travel is rebounding post-pandemic, with a growing preference for high-end experiences. This trend could bode well for Braemar's operational performance and, by extension, its ability to maintain or increase dividend payouts. However, the industry faces challenges such as increased competition from alternative lodging options like luxury rentals and potential disruptions from geopolitical events or health crises.
Investors would benefit from understanding the competitive landscape, including Braemar's market position, occupancy rates, average daily rates (ADRs) and revenue per available room (RevPAR) metrics, which are critical indicators of performance in the hospitality sector. These factors can influence the company's revenue generation capability and, consequently, its dividend-paying capacity.
As a Real Estate Investment Trust (REIT), Braemar Hotels & Resorts is required to distribute at least 90% of its taxable income to shareholders in the form of dividends, which provides a clear rationale for the dividend declarations. This structure offers tax advantages but also places a high importance on the REIT's ability to generate stable and sufficient income from its real estate assets to support these distributions.
The specific focus on luxury hotels and resorts presents both opportunities and risks. The high-end market can offer higher margins and resilience to economic downturns, as affluent travelers may be less price-sensitive. However, it also requires significant ongoing investment to maintain the high standards expected by guests and remain competitive.
Investors with a stake in REITs like Braemar will consider the quality and location of the property portfolio, capital expenditure requirements and the management's expertise in operating luxury properties. Furthermore, they will assess the impact of interest rate changes on the company's borrowing costs, as REITs are typically capital-intensive businesses with significant leverage.
The Board declared a quarterly cash dividend for the first quarter ending March 31, 2024, of
The Board declared a quarterly cash dividend for the first quarter ending March 31, 2024, of
The Board declared a monthly cash dividend for the Company's Series E Redeemable Preferred Stock equal to a quarterly rate of
The Board declared a monthly cash dividend for CUSIPs 10482B705, 10482B887 and 10482B796 of the Company's Series M Redeemable Preferred Stock equal to a quarterly rate of
The Board declared a monthly cash dividend for all remaining CUSIPs of the Company's Series M Redeemable Preferred Stock equal to a quarterly rate of
As of December 31, 2023, there were 16,316,314 shares of the Company's Series E Redeemable Preferred Stock and 1,832,805 shares of the Company's Series M Redeemable Preferred Stock issued and outstanding.
Braemar Hotels & Resorts is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.
Forward-Looking Statements
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Braemar's control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board's decision whether to pay further dividends at levels previously disclosed or to use available cash to pay dividends; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Braemar's filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.
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SOURCE Braemar Hotels & Resorts, Inc.
FAQ
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