Summit Hotel Properties' preferred stocks yield over 8% but carry high credit risk due to cyclical hotel sector.

Summit Hotel Properties' preferred stocks INN.PR.E and INN.PR.F offer yields above 8% and trade below par, attracting yield-seeking investors. However, these stocks carry elevated credit risk because the company's credit profile is constrained by the cyclical nature of the hotel industry, with Moody's-equivalent ratings of Ba3 for the company and B2 for the preferred shares. Although asset coverage and liquidity are reasonable, the company's net debt to EBITDA ratio is high at 8x, making these preferred stocks unsuitable for conservative, investment-grade-focused portfolios. Investors willing to accept higher risk may find these stocks appealing for income generation.