AHT Stock: Earn a 8% High Dividend from a Solid Company
AHT Stock Offers a High Dividend Yield of 8%
Ashford Hospitality Trust, Inc. (NYSE:AHT) is a U.S.-based company engaged in the investment and management of properties in the hospitality industry. Income investors should take a serious look at AHT stock for its eight-percent dividend yield.
Ashford owns more than 110 properties, primarily luxurious or upscale hotels, with over 25,000 hotel rooms. The majority of the portfolio is under premium brands such as Marriott International Inc (NASDAQ:MAR), Hilton Hotels Corporation (NYSE:HLT), and Hyatt Hotels Corporation (NYSE:H). These properties attract guests with higher individual net worths and the buildings are located in prime locations in major cities.
Let’s take a look why an investment in AHT stock is worth your capital.
A best-case scenario for investors is when someone with authority within in the company own shares themselves. These same employees tend to possess information that could greatly affect the share price. And since they share investing goals with regular shareholders, they will use their influence in a way that benefits both. Statistics also show that there is a lower probability of poor management and reckless spending when a company has internal investors.
In the case of AHT stock, insiders own 19.1% of the company, which is quite a large amount; in contrast, the next-highest insider ownership is Hersha Hospitably Trust (NYSE:HT) with 7.6%. A large ownership also signals to the markets that management is very bullish on its company, since insider ownership indicates a belief that the share price will trade higher soon. (Source: “Company Presentation- June 2017.,” Ashford Hospitality Trust, Inc. June 2017.)
Strategic Use of Capital
During the most recent recession, many companies’ share prices were trading at historic lows, leaving them struggling to hold on to as much capital as possible in case things got worse. Ashford took advantage of this by repurchasing its own shares. The belief in the company was that the share price was too low and would eventually trade higher–a belief which turned out to be true. And the company holds the same belief even now, as a portion of capital continues to be allocated towards share buybacks.
As an investor this would result in a tax efficient return and owning a larger percentage of the overall company. This would occur because there would be fewer shares trading on the public markets and therefore each share becomes more valuable on a percentage ownership basis. Also this move supports the stock price being there is continued buying of the shares.
High Dividend Income
AHT stock currently trades at $5.97 and offers a dividend yield of eight percent, compared to the industry average yield of 2.8%. The dividend is paid on a per-quarterly basis and has enjoys a steady and growing payout.
There is a possibility of seeing a dividend hike or one-time special dividend in the near future because of the large cash position, which would be equivalent to more than 50% of the company’s market cap. Therefore, rewarding shareholders would not harm the companies financial standing.
Final Thoughts About AHT Stock
It’s not every day that a great investment is found in which its top employees have a larger ownership. Add share repurchase programs and financial discipline to the mix and you have a very shareholder-friendly company.
This is a great alternative investment to saving or money market accounts because of the yield earned. There is also upside via assets, further boosting returns.
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners
Sign up to receive our FREE Income Investors newsletter along with our special offers and get our FREE report:
5 Dividend Stocks to Own Forever
This is an entirely free service. No credit card required. You can opt-out at anytime.
We hate spam as much as you do.