Service Properties (SVC) Moves 27.3% Higher: Will This Strength Last?
Service Properties (SVC) shares soared 27.3% in the last trading session to close at $7.04. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 18.1% loss over the past four weeks.
The increased optimism stems from the company’s announcement of a quarterly cash dividend of 20 cents per share compared with the 1 cent per share paid out in the prior quarter, following the removal of restrictions on payments of common dividends.
This real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.47 per share in its upcoming report, which represents a year-over-year change of +74.1%. Revenues are expected to be $494.99 million, up 13.2% from the year-ago quarter.
While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.
For Service Properties, the consensus FFO per share estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in FFO estimate revisions. So, make sure to keep an eye on SVC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Service Properties is a member of the Zacks REIT and Equity Trust - Other industry. One other stock in the same industry, Gladstone Commercial (GOOD), finished the last trading session 2.7% higher at $15.81. GOOD has returned -16.3% over the past month.
For Gladstone Commercial , the consensus FFO per share estimate for the upcoming report has remained unchanged over the past month at $0.37. This represents a change of -5.1% from what the company reported a year ago. Gladstone Commercial currently has a Zacks Rank of #3 (Hold).
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