It is likely that most of you know that Ashford Hospitality (AHT) has announced it is likely they will be turning the keys to 19 hotels back to the lenders–they currently have 100 hotels in the portfolio. The news release is here.
Given the history of these folks you have to really wonder when/if the economy softens will these clowns hesitate even one minute to once again suspend their preferred dividends? You can be certain they will suspend them immediately if the cash flow starts to falter. The company has NO equity left on the balance sheet and debt up the wazoo.
You can already see that investors have no trust whatsoever in the company–the preferreds , which are now paying dividends, are trading down in the $14/$17 area. You can see them here.
The point here is simply DO NOT stretch for yield – there are plenty of respectable dividends out in other lodging REITs – the list is here.