DiamondRock Hospitality Co. : DRH-US: Dividend Analysis : December 29th, 2017 (record date) : By the numbers : December 29, 2017

Our analysis is based on comparing DiamondRock Hospitality Co. with the following peers – LaSalle Hotel Properties, Host Hotels & Resorts, Inc., Hospitality Properties Trust, Ashford Hospitality Trust, Inc., Chesapeake Lodging Trust, RLJ Lodging Trust, Pebblebrook Hotel Trust and Condor Hospitality Trust, Inc. (LHO-US, HST-US, HPT-US, AHT-US, CHSP-US, RLJ-US, PEB-US and CDOR-US).

DiamondRock Hospitality Co.’s dividend yield is 5.46 percent and its dividend payout is 111.11 percent. This compares to a peer average dividend yield of 6.88 percent and a payout level of 117.83 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 42 out of a possible score of 100 is only about average.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to September 30, 2017), DRH-US paid a low quality dividend, which represents a yield of 4.37% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were high quality, 2 were medium quality and 1 was low quality.
  • The ending cash balance, with a dividend coverage of 2.08x, provides a moderate 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 September 30, 2017), DRH-US paid a low 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 2.09x), investing cash flow (coverage of -1.87x), issuance cash flow (coverage of 0.10x) and twelve-month prior cash (coverage of 2.82x), for a total dividend coverage of 3.08x.

DRH-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.06x). Thus, the total coverage including share buybacks is 3.14x, 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 had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 3.19 2.91 2.59 4.96 4.37 5.46
Dividend Payout (%) -355.56 136 49.4 116.28 87.72 111.11

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

Company Profile

DiamondRock Hospitality Co. is a real estate investment trust with interests in hotels and resorts portfolio. Its activities include owning and management of lodging properties. It operates through the following segments: Chicago, Los Angeles, Boston, US Virgin Islands, New York, Minneapolis, Denver, and Other. The company was founded by Mark W. Brugger, William W. McCarten and John L. Williams in July 2004 and is headquartered in Bethesda, MD.


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