Choice Hotels International, Inc. CHH recently suspended dividend payout in an effort to preserve cash and maintain ample liquidity in case of a possible financial crisis triggered by the coronavirus outbreak. The company will also suspend its future undeclared dividends for the remainder of 2020 as well.
With the coronavirus pandemic showing no signs of abatement, most companies across the world are undertaking measures to tackle the situation. The companies are not only stalling productions but are also focusing on cost-cutting actions.
Notably, to alleviate the financial impact of the COVID-19 pandemic, the company has taken certain actions to reduce operating expenses. Moreover, the CEO and the board of directors have agreed to a pay cut for 2020. The board has also decided to temporarily furlough part of its corporate workforce in Europe. Also, non-essential and discretionary capital expenditures have been eliminated.
March Occupancy Rate
Choice Hotels has been witnessing soft occupancy levels due to COVID-19. Domestic occupancy levels were below 50% in March, following a soft trend in the last 10 days, where occupancy rates were in the range of 26-33%. Notably, the trend continued in early April as well.
Although, this deadly severe acute respiratory syndrome has claimed too many lives so far, the company shows enough resilience to fight the current calamity. We believe that it will continue to monitor the COVID-19 crisis as well as adjust its business contingency plans to emerge out of this situation.
So far this year, shares of the company have declined 30.1% compared with the industry’s fall of 41.2%.
Zacks Rank & Key Picks
Choice Hotels currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Consumer Discretionary sector include Gaia, Inc. GAIA, Camping World Holdings, Inc. CWH and LRAD Corporation GNSS, each sporting a Zacks Rank #1.
Gaia has a three-five year expected earnings per share growth rate of 15%.
Camping World Holdings and LRAD’s 2020 earnings are expected to surge 197% and 62.5%, respectively.
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Choice Hotels International, Inc. (CHH) : Free Stock Analysis Report
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