Choice Hotels International, Inc. : CHH-US: Dividend Analysis : October 03rd, 2016 (record date) : By the numbers : October 24, 2016

Our analysis is based on comparing Choice Hotels International, Inc. with the following peers – Wyndham Worldwide Corporation, Marriott International, Inc. Class A, InterContinental Hotels Group PLC Sponsored ADR, La Quinta Holdings, Inc., Hilton Worldwide Holdings, Inc. and China Lodging Group Ltd. Sponsored ADR (WYN-US, MAR-US, IHG-US, LQ-US, HLT-US and HTHT-US).

Choice Hotels International, Inc.’s dividend yield is 1.81 percent and its dividend payout is 35.84 percent. This compares to a peer median dividend yield of 1.72 percent and a payout level of 33.52 percent. This type of dividend performance might make it a good stock for dividend investors. In addition, the company’s relatively good dividend quality score of 75 out of a possible score of 100 points to some sustainability of its robust payout ratio, and underscores its attractiveness for dividend investors seeking current income.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to June 30, 2016), CHH-US paid a medium quality dividend, which represents a yield of 1.79% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during 4 of these years — of these 3 were high quality and 1 was medium quality.
  • The ending cash balance, with a dividend coverage of 4.57x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to June 30, 2016), CHH-US paid a medium quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.39x), investing cash flow (coverage of -3.27x), issuance cash flow (coverage of 0.40x) and twelve-month prior cash (coverage of 5.08x), for a total dividend coverage of 5.57x.

CHH-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -1.96x). Thus, the total coverage including share buybacks is 7.54x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.

Dividend History

Item 2011-12-31 2012-12-31 2013-12-31 2014-12-31 2015-12-31 Latest
Dividend Yield (%) 0 33.45 1.14 1.36 1.59 1.81
Dividend Payout (%) 39.57 538.65 38.74 35.71 35.59 35.84

A complete list of metrics and analysis is available on the company page.

Company Profile

Choice Hotels International, Inc. franchises hotels. The company offers full service hotels in the economy, mid-scale and upscale segments. It franchises lodging properties under the brand names: Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria Suites and Ascend Collection. The company operates through two segments: Franchising & SkyTouch Technology. The Franchising segment includes the company’s hotel franchising operations consisting of its eleven brands. The SkyTouch Technology is a division of the company that develops and markets cloud-based technology products to hoteliers not under franchise agreements with the Company. Choice Hotels International was founded in 1996 and is headquartered in Silver Spring, MD.

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