A covered 2.8% yield on improving hotels, held back only by a dividend still short of its pre-2020 rate. The $0.14 quarterly dividend is covered at about 28% of guided Adjusted FFO, and same-property RevPAR rose 5.6% to $206.54 in Q2 2026 with occupancy flat at 72.3%. Leverage of about 4.7 times, on labelled arithmetic, sits inside the pass band. The dividend was $0.275 before 2020, paid nothing until a $0.10 restart in 2023, then rose to $0.12 in 2024 and $0.14 from January 2025, flat through 2026 — a genuine rebuild that has not yet restored the old rate.
Key risk: Occupancy is flat and earnings include asset-sale noise, so RevPAR growth must carry the rebuild.
Changes if: The dividend is raised toward the pre-2020 rate on sustained FFO growth, or guided FFO is cut.
- ✓AFFO payout ~28% of guided Adjusted FFO, under the 80% pass threshold; Q2 23%.
- ✓Leverage ~4.7× on labelled arithmetic, under the 6× pass threshold.
- !Raise history $0.275 pre-2020; none until $0.10 restart 2023; $0.12 in 2024; $0.14 from Jan 2025, flat 2026.
- ✓Operating Same-property RevPAR $206.54, +5.6%; occupancy 72.3% flat; Q2 net loss $19.3M incl. non-cash impairment on Kimpton RiverPlace sale.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.