Investment Thesis
Braemar Hotels & Resorts (BHR) delivered a weak Q2 2019 due to a declining occupancy ratio and comparable revenue per available room. The REIT pays a 7.4%-yielding dividend and is trading at an attractive valuation. However, it has a leveraged balance sheet. In addition, its operating performance is highly dependent on the strength of the economy. Given the fact that we are now in the latter stage of the economic cycle, we think the risk and reward profile is not compelling. Therefore, investors may want to stay on the sidelines.
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