An analyst recently recommended the company's Preferred-C stock. While I have read several negative reports about the company, it looks to me like the Preferrred stock here (XD) may be a worthwhile buy for income. Thoughts? Thanks.
I see FCH differently than many of the other posters. I think FCH is heading toward a good future. My concern with the preferred (and I have some) is that a private equity entity could buy out the common and discontinue SEC reporting. This has happened in other real estate cycles and the preferred usually suffers.
it is cumulative preferred, which means that the only way you can loose the dividend, if company will go bankrupt. The ratings on the company only CCC, but I hope they will survive. They reinstated dividend on preferred stocks in 2011.
They also went 3 years without paying a pfd div and that was when they had common equity. Now every time they pay a pfd div, the common deficit increases. There are many pfd stocks that pay about 8% and are backed by good balance sheets. Why buy this one?
Any time you buy a pfd, you should be sure there is substantial common equity underlying it. Otherwise, the pfd is like a high yielding common with no assurance the div will be paid. FCH has little or no common equity and is loosing money which makes the pfds very risky imho.
The common may not have much equity, 1 reason is the preferred is taken out.
FFO is positive, they are generating enough to pay the Divi.
Hotel prices are rising (slowly), so common equity will return.
Any stock with a Divi over 8% has risk, but I think it is worth it.