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1. Company Snapshot

1.a. Company Description

Apple Hospitality REIT, Inc.(NYSE: APLE) is a publicly traded real estate investment trust (“REIT”) that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States.Apple Hospitality's portfolio consists of 235 hotels with more than 30,000 guest rooms located in 87 markets throughout 34 states.


Concentrated with industry-leading brands, the Company's portfolio consists of 104 Marriott-branded hotels, 126 Hilton-branded hotels, three Hyatt-branded hotels and two independent hotels.

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1.b. Last Insights on APLE

Apple Hospitality REIT, Inc.'s recent performance was impacted by occupancy softness, despite its premium properties and balance sheet providing some resilience. The company's high-yielding dividend, with an 8.26% yield, and low leverage, make it a compelling value play. However, risks include economic uncertainty, variable-rate debt, and competitive pressures. With rate cuts on the horizon, lower interest expenses could boost AFFO and dividends. The company's Q2 2025 earnings call highlighted these challenges, and investors are cautious due to volatility risks and potential dividend traps.

1.c. Company Highlights

2. Apple Hospitality REIT's Q3 2025: Resilient Demand and Strategic Portfolio Management

Apple Hospitality REIT reported a total revenue of $365 million for Q3 2025, down approximately 1% compared to the same period in 2024. The company's comparable hotels adjusted hotel EBITDA margin was 35.2% for the quarter, down 200 basis points from the same period last year. Earnings per share (EPS) came in at $0.42, beating analyst estimates of $0.4. The company's ability to manage expenses and operate efficiently is reflected in its variable expense growth moderation and industry-leading margins.

Publication Date: Nov -05

📋 Highlights
  • Capital Allocation Strategy: Sold 3 hotels ($37M) and 4 under contract ($36M), using proceeds to repurchase 3.8M shares at $12.73/share ($48M), enhancing shareholder value.
  • EBITDA Margin Resilience: Maintained industry-leading 35.2% comparable hotels EBITDA margin, despite 200 bps decline YoY due to economic pressures.
  • Travel Demand Resilience: Portfolio total revenue at $365M Q3, down 1% YoY, but outperformed in group bookings (15% mix, +50 bps) amid weak corporate transient demand.
  • Government Shutdown Impact: RevPAR fell 3% in Q3 due to shutdown, with August/September declines (-3%) following July’s 1% growth, expected to benefit from post-reopening pent-up demand.
  • Expense Management: Controlled variable expenses, with total hotel expenses up 1.7% Q3 and 2.2% YTD, while payroll per occupied room rose <2% YoY to $40.

Operational Performance

The company's hotel teams have been diligent in efforts to mitigate cost pressures and operate efficiently while delivering high-quality service and results. As a result, the portfolio's comparable hotels total revenue was $365 million for the quarter, and $1.1 billion year-to-date through September, both down approximately 1% to the same periods of 2024. According to Liz Perkins, the team has done an exceptional job in pivoting to build additional base business through group, which includes both leisure and corporate group business.

Capital Allocation and Portfolio Management

Apple Hospitality REIT continues to take advantage of the current disconnect between public and private market valuations by selectively selling assets and redeploying proceeds to buy its own stock. The company has completed the sale of 3 hotels for a total combined sales price of $37 million and has 4 hotels under contract for sale for a total combined sales price of approximately $36 million. It has also invested nearly $83 million in its own shares since May of last year.

Valuation and Outlook

With a P/E Ratio of 15.08 and a Dividend Yield of 9.04%, the company's valuation appears reasonable. The company's updated outlook for 2025 reflects performance year-to-date as well as the potential negative impact of prolonged economic uncertainty and the government shutdown on the remainder of the year. Analysts estimate next year's revenue growth at 1.8%, indicating a potential rebound. The company's experience, discipline, and agility enable it to adapt dynamically, maximize profitability, and capture value through opportunistic transactions.

Strategic Initiatives

Apple Hospitality REIT is focused on executing its strategy with discipline and patience, ensuring its portfolio is well-positioned to deliver growth and value creation over time. The company is exploring opportunities to maximize revenue, including group business and other demand generators. With a strong track record of outperformance during periods of economic uncertainty, the company is well-positioned for upside should it see reacceleration in broader economic growth.

3. NewsRoom

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Touchstone Small Company Fund Q3 2025 Performance Review

Nov -27

Source: seekingalpha.com

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SEGRO (OTCMKTS:SEGXF) versus Apple Hospitality REIT (NYSE:APLE) Financial Review

Nov -24

Source: defenseworld.net

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Apple Hospitality REIT: High-Yield Monthly Dividends With Low Leverage And Solid Recovery Potential

Nov -19

Source: seekingalpha.com

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Want $3,500 per Year in Monthly Passive Income? Invest Just $2,500 in These Dividend Stocks

Nov -18

Source: 247wallst.com

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Buried Treasure: Your Map To 13 Strong-Yielding Bargain REITs

Nov -17

Source: seekingalpha.com

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One Fed Governor Sees Half-Point Cut in December: Our Top 7% and 8% Dividend Stock Picks

Nov -17

Source: 247wallst.com

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High Potential In Low Vol? These Dividends Up To 8.6% Payers Think So

Nov -10

Source: forbes.com

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When The Stimulus Stops

Nov -09

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.44%)

6. Segments

Room

Expected Growth: 4.5%

Apple Hospitality REIT's 4.5% room growth is driven by increasing demand for mid-scale hotels, strategic acquisitions, and effective asset management. Additionally, the company's focus on operational efficiency, revenue management, and loyalty programs contribute to the growth. Furthermore, the growing popularity of travel and tourism, particularly in the US, also supports the segment's expansion.

Other

Expected Growth: 3.5%

Apple Hospitality REIT's 3.5% growth in 'Other' segment is driven by increasing demand for its hospitality services, strategic acquisitions, and effective cost management. Additionally, the company's diversified portfolio of hotels across the US, with a focus on select-service properties, has contributed to its growth. Furthermore, the company's ability to maintain a strong balance sheet and invest in growth initiatives has also supported its growth momentum.

Food and Beverage

Expected Growth: 4.2%

Apple Hospitality REIT's 4.2% growth in Food and Beverage is driven by increasing demand for experiential travel, strategic hotel acquisitions, and effective cost management. Additionally, the company's focus on premium brands, such as Hilton and Marriott, contributes to higher average daily rates and revenue per available room.

7. Detailed Products

Hotels

Apple Hospitality REIT, Inc. owns and invests in a diversified portfolio of upscale, select-service hotels, including Hilton, Marriott, and Hyatt branded properties.

Hospitality Real Estate

The company acquires, owns, and operates a portfolio of hotel properties, providing a steady income stream through rental income.

Hotel Management Services

Apple Hospitality REIT, Inc. provides management services to its hotel properties, ensuring efficient operations and maximizing revenue potential.

Franchise Agreements

The company enters into franchise agreements with leading hotel brands, ensuring consistency and quality across its portfolio.

8. Apple Hospitality REIT, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Apple Hospitality REIT, Inc. operates in the hospitality industry, which has a low threat of substitutes due to the unique experiences and services offered by hotels.

Bargaining Power Of Customers

Customers have some bargaining power due to the availability of alternative accommodations, but Apple Hospitality REIT, Inc.'s strong brand reputation and loyalty programs help to mitigate this power.

Bargaining Power Of Suppliers

Suppliers of goods and services to Apple Hospitality REIT, Inc. have limited bargaining power due to the company's large scale and negotiating power.

Threat Of New Entrants

The hospitality industry has a high threat of new entrants due to the relatively low barriers to entry, and Apple Hospitality REIT, Inc. must continually innovate and improve its services to stay competitive.

Intensity Of Rivalry

The hospitality industry is highly competitive, with many established players and a high level of rivalry among companies, including Apple Hospitality REIT, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.30%
Debt Cost 6.24%
Equity Weight 70.70%
Equity Cost 9.54%
WACC 8.58%
Leverage 41.45%

11. Quality Control: Apple Hospitality REIT, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Rithm Capital

A-Score: 6.8/10

Value: 6.6

Growth: 2.3

Quality: 6.0

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Apple Hospitality REIT

A-Score: 6.6/10

Value: 7.2

Growth: 5.7

Quality: 7.0

Yield: 9.0

Momentum: 2.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Park Hotels & Resorts

A-Score: 6.1/10

Value: 8.6

Growth: 4.9

Quality: 4.6

Yield: 10.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Innovative Industrial Properties

A-Score: 6.1/10

Value: 6.6

Growth: 6.3

Quality: 8.4

Yield: 10.0

Momentum: 0.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Host Hotels & Resorts

A-Score: 6.1/10

Value: 5.5

Growth: 5.6

Quality: 5.6

Yield: 7.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Ryman Hospitality Properties

A-Score: 5.3/10

Value: 3.3

Growth: 7.0

Quality: 4.6

Yield: 6.0

Momentum: 2.5

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.62$

Current Price

11.62$

Potential

-0.00%

Expected Cash-Flows