Good News, Stock Dives- Wtf Happened?
Q: Someone help out a beginner... looks like the earnings news was pretty good to me... why did this go down today? Could be that it suspends dividends on common. But it is a necessary step to preserve liquidity I guess. Well, I'm a common stockholder, I'm planning to buy more at this price, hopefully it will give out dividend for the next quarter. What you guys think? Do you think the dividend will be back on the common share next quarter?
A: Actually, they can stop dividends on the common, because the dividends on the preferred stock also count towards their obligation to pay out their income. Since it looks like their income might be less than the dividends due on the preferred, the common may not get a dividend at all this year. That being said, I think this company is hugely undervalued, with some great assets in great markets. Hey Guys. I just wanna be honest. The reason I'm buying this stock is that it gives big fat dividends every quarter. Another reason is that the Price/Book value. If I'm right about the book value, we're around paying 2 dollars to acquire 10 dollars worth of SHO's property(mainly hotels). Even if the value of the properties held by SHO may drop in the future, but it should still worth more than 20% of its current value. Under these reasons, I think SHO is undervalued. What do you guys think? One thing I'm not sure about is the preferred stocks. It seems like SHO had issued substantial amount of preferred stocks that dilute the holding of the common. I just found this stock as well because of the Dividend rate. If you look at 2006 at least Google Finance shows that they skipped a dividend payment for Q1 of 2006 and then continued so it is possible that they will start dividends when the economy rebounds and consumer confidence recovers. At the current price, they would be paying close to 40% profit in dividends. I need to look more into this but that would be an unbelievable return.
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