Extended Stay America (STAY) will cut its quarterly dividend by 95.7 percent in 2020 because of the COVID-19 pandemic. Last year the company raised its quarterly dividend by 4.5 percent to $0.23 per share.

The next dividend of one cent per share is payable on June 4, 2020 to shareholders of record on May 21, 2020. A new annual dividend rate of $0.04 per share yields 0.4% at a stock price of $11.11.

In its press release dated May 6, 2020 announcing first quarter 2020 results and updating on COVID-19, the management and the boards of directors of Extended Stay America, Inc. and ESH Hospitality, Inc. state that they intend to review future company distributions once business conditions have stabilized. ESH Hospitality, Inc. will continue to distribute at least 90% of its pre-tax earnings to maintain its REIT status, according to the company in the press release.

Extended Stay America is the leading brand in the mid-priced extended stay segment in the U.S. with 628 hotels and approximately twice as many rooms as its nearest competitor.  ESH Hospitality, Inc. (“ESH”), a subsidiary of Extended Stay America, Inc. (“ESA”), is the largest lodging REIT in North America by unit and room count, with 554 hotels and approximately 61,500 rooms in the U.S. ESA also manages or franchises an additional 74 Extended Stay America hotels.