Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
As of Mar. 2024, Service Properties Trust has a Sloan Ratio of -5.40%, indicating the company is in the safe zone and there is no funny business with accruals.
Service Properties Trust Sloan Ratio % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Service Properties Trust's Sloan Ratio %
For the REIT - Hotel & Motel subindustry, Service Properties Trust's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Service Properties Trust's Sloan Ratio % Distribution in the REITs Industry
For the REITs industry and Real Estate sector, Service Properties Trust's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Service Properties Trust's Sloan Ratio % falls into.
Service Properties Trust Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Service Properties Trust's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Service Properties Trust's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was -11.278 (Jun. 2023 ) + -4.128 (Sep. 2023 ) + -43.323 (Dec. 2023 ) + -78.383 (Mar. 2024 ) = $-137 Mil.
Service Properties Trust's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 316.13 (Jun. 2023 ) + 73.455 (Sep. 2023 ) + 83.591 (Dec. 2023 ) + -0.926 (Mar. 2024 ) = $472 Mil.
Service Properties Trust's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -10.292 (Jun. 2023 ) + -52.994 (Sep. 2023 ) + -80.543 (Dec. 2023 ) + -74.829 (Mar. 2024 ) = $-219 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Service Properties Trust (NAS:SVC) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2024, Service Properties Trust has a Sloan Ratio of -5.40%, indicating the company is in the safe zone and there is no funny business with accruals.
Service Properties Trust Sloan Ratio % Related Terms
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Service Properties Trust (Service Properties Trust) Business Description
Service Properties Trust is a real estate investment trust that owns hotel properties. These properties are located primarily in the United States, along with Canada and Puerto Rico. The company operates through its hotel investment unit and net lease investments. The firm derives the majority of its revenue from the hotel real estate investments unit. The hotels are distinguished between their service levels, which include full service, select service, and extended stay; and chain scale, which includes luxury, upper upscale, upscale, upper midscale, and midscale. Most hotels are extended stay or upscale. Some of the major hotel brands include Courtyard by Marriott, Royal Sonesta, Crowne Plaza Hotels & Resorts, and Hyatt Place.
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