Service Properties Trust: Lower Hotel Occupancy Renewing Dividend Concerns

Jeremy LaKosh
5.5K Followers
(5min)

Summary

  • Service Properties Trust's first quarter financial results showed a slight uptick in revenue, but a $72 million loss before taxes.
  • The hotel segment is dragging due to declining occupancy rates, while the net lease portion is performing well but not enough to support corporate costs.
  • The company's ability to generate cash flow and sustain its dividend is a primary concern, as operating cash flow dropped below zero in the first quarter.

Radisson RED, Finnieston Quay, Glasgow, Scotland

Liz Leyden/iStock Unreleased via Getty Images

Service Properties Trust (NASDAQ:SVC) is a real estate investment trust comprised of hotels and net lease retail properties with no employees and external management that controls their operations. Last year, I wrote

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5.5K Followers
About My Writing: I am currently focused on income investing through either common shares, preferred shares, or bonds.  I will occasionally break away and write about the economy at large or a special situation involving a company I've been researching in. I target two articles per week for publication on Monday and Tuesday.About My Background: Bachelors in history/political science, Masters in Business Administration with a specialization in Finance and Economics. I enjoy numbers. I have been investing since 2000. Professionally, I am the CEO of an independent living retirement community in Illinois.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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