SVC - Service Properties Trust: Lower Hotel Occupancy Renewing Dividend Concerns
2024-06-05 14:10:56 ET
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.
Service Properties Trust ( 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 about the income opportunities with the company’s high yield debt . Earlier this week, I participated in a tender offer for my debt holdings. With several high-yielding options remaining, I reviewed the company’s financials and decided against putting new money into Service Properties’ debt....
Service Properties Trust: Lower Hotel Occupancy Renewing Dividend Concerns