Summit Hotel Properties (NYSE:INN) announced a 50% increase in its dividend to $0.06 per share, or $0.24 annually, sending its shares up by over 3% on Friday. With an annual yield of 3.9%, the move aims to boost shareholder value and attract more investors to the company.
The increase in dividend comes as Summit Hotel Properties seeks to capitalize on the growing demand for hotels and resorts in the US. The company, which owns and manages upscale hotels across the country, has been expanding its portfolio in recent years to tap into the rising trend of domestic tourism.
The hike in dividend is also part of the company’s strategy to provide long-term value to its shareholders. By returning a higher portion of its profits to investors, Summit Hotel Properties hopes to incentivize investors to hold onto its stock for longer periods of time.
This move also underscores the company’s confidence in its future growth prospects. By increasing its dividend, Summit Hotel Properties is signaling to investors that it is in a strong financial position and has the resources to continue growing and expanding its operations.
The announcement of the dividend hike was well received by investors, with the stock trading up by more than 3% on Friday. The move also comes as the broader market continues to recover from the pandemic-induced downturn, with investors increasingly looking for stable and reliable sources of income.
Summit Hotel Properties has been positioning itself as a leader in the upscale hotel industry in the US. With a portfolio of over 70 hotels in prime locations across the country, the company is well-positioned to capitalize on the growing demand for domestic tourism.
The company’s recent acquisitions have also helped to boost its earnings and cash flow. In Q1 2023, Summit Hotel Properties reported a net income of $15.6 million, up from $4.6 million in the same period last year. Its revenue also increased by 12.3% year-over-year to $129.9 million.
As the economy continues to recover and travel restrictions are lifted, Summit Hotel Properties is expected to benefit from the pent-up demand for travel and tourism. The company’s focus on upscale hotels in prime locations across the US also puts it in a good position to benefit from the shift towards domestic tourism.
In conclusion, Summit Hotel Properties’ decision to hike its dividend by 50% is a positive development for the company and its shareholders. The move underscores the company’s confidence in its future growth prospects and its commitment to providing long-term value to its investors. It also reflects the growing demand for stable and reliable sources of income in the current market environment. With its strong financial position and well-positioned portfolio of upscale hotels, Summit Hotel Properties is well-positioned to capitalize on the recovering travel and tourism industry in the US.
