In This Article:
Braemar Hotels & Resorts, Inc. (NYSE:BHR) stock is about to trade ex-dividend in 3 days time. Ex-dividend means that investors that purchase the stock on or after the 27th of September will not receive this dividend, which will be paid on the 15th of October.
Braemar Hotels & Resorts's next dividend payment will be US$0.2 per share, on the back of last year when the company paid a total of US$0.6 to shareholders. Based on the last year's worth of payments, Braemar Hotels & Resorts has a trailing yield of 6.6% on the current stock price of $9.64. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Braemar Hotels & Resorts has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Braemar Hotels & Resorts
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Braemar Hotels & Resorts paid out 108% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances. While Braemar Hotels & Resorts seems to be paying out a very high percentage of its income, REITs have different dividend payment behaviour and so, while we don't think this is great, we also don't think it is unusual. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If Braemar Hotels & Resorts didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. Fortunately, it paid out only 49% of its free cash flow in the past year.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Braemar Hotels & Resorts was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.