Ashford Trust Declares Preferred Dividends for Q1 2025: A Closer Look

Ashford Hospitality Trust, Inc. (NYSE: AHT), a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels, has declared preferred dividends for the first quarter of 2025. The company announced the dividends on January 13, 2025, which will be paid on April 15, 2025, to stockholders of record as of March 31, 2025. Let's take a closer look at the declared dividends and their potential impact on the stock price and valuation.

The declared preferred dividends are as follows:

* Series D (8.45%): $0.5281 per share
* Series F & G (7.375%): $0.4609 per share
* Series H & I (7.50%): $0.46875 per share
* Series J: Monthly payments of $0.16667 per share
* Series K: Various monthly payments ranging from $0.17083 to $0.17500 per share depending on CUSIP

These dividends represent a continuation of Ashford Trust's commitment to returning capital to shareholders through regular distributions. The company's focus on generating stable cash flows from its diversified portfolio of hotels allows it to maintain and grow its dividends over time.

The dividend yields for Ashford Trust's preferred shares range from approximately 2.27% to 2.63%, depending on the series. These yields are lower than the average dividend yield for the REIT sector, which was around 3.5% in 2024. This suggests that Ashford Trust's preferred dividends may not be as attractive to income-oriented investors as those offered by other REITs. However, it's essential to consider that the company's overall financial performance and other factors also play a role in its valuation.

Ashford Trust's preferred dividends can impact its stock price and valuation in several ways. First, the dividends can attract income-oriented investors, potentially increasing demand for the stock and driving up the share price. Additionally, the company's ability to cover its preferred dividends with earnings is an important factor in maintaining investor confidence. As of December 31, 2024, Ashford Trust had a dividend cover of 1.1, indicating that its earnings are more than enough to cover the preferred dividends. This suggests that the company is in a strong financial position to maintain and potentially increase its dividends, which can positively impact the stock price.

However, Ashford Trust's preferred dividends have not been increasing over the past 5.5 years, with a compounded growth rate of -0.32%. This lack of dividend growth may negatively impact the stock's valuation, as investors may prefer companies with a history of consistent dividend increases. Additionally, the company's dividend payout ratio, which is not provided in the given information, can also impact the stock's valuation. A lower payout ratio indicates that the company is retaining more of its earnings for reinvestment, which can lead to higher growth potential. However, a higher payout ratio may attract income-oriented investors.

In conclusion, Ashford Trust's preferred dividends can impact its stock price and valuation through various factors, including dividend yield, dividend coverage, dividend growth, dividend payout ratio, and market sentiment. By analyzing these factors and considering the company's overall financial performance, investors can make more informed decisions about the stock's potential for capital appreciation and income generation. As Ashford Trust continues to execute its GRO AHT strategy and approaches the repayment of its corporate strategic financing, investors should monitor the company's progress and assess the potential impact of its preferred dividends on the stock price and valuation.