Service Properties Trust hikes dividend by 1900%

On October 13, 2022, Service Properties Trust (SVC) declared a dividend hike of 1900% from $0.01 to $0.20 quarterly per share. This is one of the biggest dividend hikes in the USA announced in 2022.

Service Properties Trust today announced its Board of Directors has declared a quarterly cash dividend at $0.20 per common share ($0.80 per share per year), representing a 37% payout ratio based on Q2 2022 normalized funds from operations, or Normalized FFO. This distribution will be paid to SVC’s common shareholders of record as of the close of business on October 24, 2022 and distributed on or about November 17, 2022.

Brian Donley, Service Properties Trust’s Chief Financial Officer and Treasurer, made the following statement: “As the result of the continued improved performance of our hotel portfolio and the steady performance of our net lease assets, we are pleased to declare our quarterly common dividend at $0.20 per share. We believe the dividend at this level is well covered and sustainable, representing only a 37% Normalized FFO payout ratio on our second quarter 2022 results, as well as positions SVC well for possible additional dividend increases in the future. We also believe a dividend at this level balances our desire to return excess cashflows to shareholders with the company’s near-term liquidity needs. After payment of this dividend, SVC expects to have over $750 million of available liquidity, which is far in excess of near-term obligations.”

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust, or REIT, with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of June 30, 2022, SVC owned 247 hotels with over 41,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of June 30, 2022, SVC also owned 775 retail service-focused net lease properties totaling over 13 million square feet throughout United States. SVC is managed by The RMR Group (Nasdaq: RMR), an alternative asset management company with more than $37 billion in assets under management as of June 30, 2022 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.