Ashford Hospitality falls 16% after cutting its dividend to 6c per share
Earlier today, Ashford Hospitality Trust announced that its board declared a quarterly cash dividend of 6c per diluted share for the company's common stock for the second quarter ending June 30. The prior dividend was 12c per share. The dividend, which equates to an annual rate of 24c per share, will be distributed on July 15, to shareholders of record as of June 28. Our Board of Directors set the quarterly common dividend at a level that it believes is competitive with our lodging REIT peers," said Douglas A. Kessler, Ashford Trust's President and Chief Executive Officer. "For some time, our dividend has significantly exceeded what we would have needed to distribute from a taxable income standpoint. This adjustment effectively preserves capital for more advantageous purposes including strengthening our balance sheet and enhancing our ability to pursue more opportunistic growth such as acquisitions that qualify for our Enhanced Return Funding Program. One of the intended purposes of the ERFP is to make good deals, great deals. We believe we are having success in achieving that goal. To date, we have been pleased with the strong performance and attractive initial results from our recent ERFP acquisitions, namely the Hilton Alexandria Old Town, La Posada de Santa Fe, Embassy Suites New York Midtown Manhattan, and Hilton Santa Cruz/Scotts Valley." Shares of Ashford Hospitality are down 16% or 68c per share to $3.61 per share in morning trading.