Dividend Coverage: This Select-Service Hotel REIT has a Dividend Yield of 6.71%; Will Trade Ex-Dividend on August 31, 2017

LONDON, UK / ACCESSWIRE / August 30, 2017 / Pro-Trader Daily takes a closer look at Apple Hospitality REIT, Inc. (NYSE: APLE) (“Apple Hospitality”) as the Company’s stock will begin trading ex-dividend on August 31, 2017. In order to capture the dividend payout, investors must purchase the stock a day prior to the ex-dividend date that is by latest at the end of the trading session on August 30, 2017. Are you looking for research on dividend stocks, if so register with us now for your free membership at:

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Dividend Declared

On August 22, 2017, Apple Hospitality REIT announced that its Board of Directors declared a regular monthly cash distribution of $0.10 per common share for the month of September 2017. The distribution is payable on September 18, 2017, to shareholders of record as of September 05, 2017.

Apple Hospitality REIT’s indicated dividend represents a yield of 6.71%, which is substantially above the average dividend yield for the financial sector of 3.31%. The Company has raised its dividend for one year.

Dividend Insights

Apple Hospitality currently has a dividend payout ratio of 69.0%, which indicates that the Company distributes approximately $0.69 for every $1.00 earned. The dividend payout ratio reflects how much money a company is returning to shareholders versus how much money it is keeping on hand to reinvest in growth, to pay off debt, and/or to add to its cash reserves.

According to analysts’ estimates, Apple Hospitality is forecasted to report earnings of $0.99 versus the Company’s annualized dividend of $1.20. Apple Hospitality is a Real Estate Investment Trust (REIT). REITs are structured by law to distribute at least 90% of earnings. Moreover, since REITs generate income from owning portfolios of investment in real estate, they are likely to have higher depreciation charges.

Since depreciation is a non-cash charge, it does not directly impact the ability of dividend the companies can distribute. For this reason, Fund from Operations (FFO) is calculated by adding depreciation and amortization to earnings and subtracting any gains on sales, and this provides a better picture of a company’s profitability and capacity to pay and sustain dividends. For instance, for the quarter ended June 30, 2017, net income available to Apple Hospitality’s common shareholders was $87.61 million, or $0.39 per share, while the Company’s modified FFO from operations was $113.65 million, or $0.51 per diluted share, which should sufficiently cover the dividend payout.

As of June 30, 2017, Apple Hospitality’s total assets were worth $4.90 billion compared to total liabilities of $1.40 billion. The Company’s strong financial position indicates its ability to absorb any fluctuations in earnings and cash flow and to sustain its dividend distribution for a long period.

Recent Development for Apple Hospitality

On August 08, 2017, Apple Hospitality announced net income for the quarter ended June 30, 2017 of $87.61 million, or $0.39 per share, with net income surging 60.1% compared to net income of $54.72 million, or $$0.31per share, for Q2 2016.

Apple Hospitality completed the sale of its 224-room Hilton® hotel in Dallas, Texas, on April 20, 2017, for a gross sales price of approximately $56 million, including debt assumed by the buyer of approximately $27 million. As a result of the sale, the Company recognized a gain of approximately $16 million during the second quarter of 2017.

In June 2017, the Company entered into a contract for the sale of its 316-room Marriott® hotel in Fairfax, Virginia for a gross sales price of $42 million. The contract is subject to a number of conditions to closing, therefore, there can be no assurance that a closing will occur. If closing conditions are met, it is anticipated that the sale would be completed by the end of 2017. The Company currently estimates a gain on sale of approximately $1 million if the deal is finalized.

Capital Improvements

Apple Hospitality consistently reinvests in its hotels to maintain and enhance each property’s relevance and competitive position within its respective market. During the six months ended June 30, 2017, the Company invested approximately $24 million in capital expenditures. The Company plans to continue to reinvest in its hotels and anticipates investing an additional $35 million to $45 million in capital improvements during the remainder of 2017, which includes various scheduled renovation projects for approximately 15 to 20 properties.

About Apple Hospitality REIT, Inc.

Apple Hospitality REIT is a publicly traded REIT that owns one of the largest portfolios of upscale, select-service hotels in the United States. The Company’s portfolio consists of 235 hotels, with approximately 30,000 guestrooms, diversified across the Hilton® and Marriott® families of brands with locations in urban, high-end suburban and developing markets throughout 33 states.

Stock Performance

At the close of trading session on Tuesday, August 29, 2017, Apple Hospitality REIT’s stock price rose slightly by 0.34% to end the day at $17.81. A total volume of 762.22 thousand shares were exchanged during the session. The Company’s shares are trading at a PE ratio of 22.12 and have a dividend yield of 6.74%. At Tuesday’s closing price, the stock’s net capitalization stands at $3.97 billion.

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