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  5. HOT.UN: These 2 companies paid a dividend prior to the Covid Collapse. [American Hotel Income Properties REIT LP]
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Investment Q&A

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Q: These 2 companies paid a dividend prior to the Covid Collapse. In the case of American Hotel there is some indication of a possible return to dividend payments by Dec 2021 but it's not clear if Surge Energy will return to paying a dividend. Do you think these companies will return to paying dividends again, and if so, what should I be watching for to give me an idea of how long it will take to return to paying dividends.

Looking forward to your need website.

Asked by Phil on June 17, 2021
5i Research Answer:

Cash flow is the most important metric when looking at dividend potential. If we look at HOT's 1Q, operating cash flow was still negative. But of course, as business returns, this will likely move to positive quickly. But it all comes down to fundamental performance. SGY still has a lot of debt and may be slower to return to dividends if it chooses to pay down debt. Operating cash flow was $15.5M in the 1Q, but the company also paid $9M in interest charges. Paying a dividend would leave a very small cushion over finance costs, at least currently.