CHOICE HOTELS INTL INC (CHH) Stock Fundamental Analysis
NYSE:CHH - New York Stock Exchange, Inc. - US1699051066 - Common Stock - Currency: USD
Taking everything into account, CHH scores 5 out of 10 in our fundamental rating. CHH was compared to 136 industry peers in the Hotels, Restaurants & Leisure industry. While CHH belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CHH has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
CHH had positive earnings in the past year.
In the past year CHH had a positive cash flow from operations.
Each year in the past 5 years CHH has been profitable.
In the past 5 years CHH always reported a positive cash flow from operatings.
1.2 Ratios
CHH's Return On Assets of 11.78% is amongst the best of the industry. CHH outperforms 88.24% of its industry peers.
CHH has a better Return On Invested Capital (18.38%) than 88.97% of its industry peers.
CHH had an Average Return On Invested Capital over the past 3 years of 21.54%. This is significantly above the industry average of 14.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.78% | ||
| ROE | N/A | ||
| ROIC | 18.38% |
ROA(3y)12.74%
ROA(5y)11.57%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.54%
ROIC(5y)19.3%
1.3 Margins
With an excellent Profit Margin value of 18.81%, CHH belongs to the best of the industry, outperforming 91.91% of the companies in the same industry.
In the last couple of years the Profit Margin of CHH has remained more or less at the same level.
The Operating Margin of CHH (31.47%) is better than 97.06% of its industry peers.
In the last couple of years the Operating Margin of CHH has remained more or less at the same level.
With a decent Gross Margin value of 52.20%, CHH is doing good in the industry, outperforming 62.50% of the companies in the same industry.
CHH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.47% | ||
| PM (TTM) | 18.81% | ||
| GM | 52.2% |
OM growth 3Y-8.9%
OM growth 5Y0.28%
PM growth 3Y-11.25%
PM growth 5Y-1.09%
GM growth 3Y-3.67%
GM growth 5Y1.67%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CHH is creating value.
Compared to 1 year ago, CHH has less shares outstanding
CHH has less shares outstanding than it did 5 years ago.
CHH has a worse debt/assets ratio than last year.
2.2 Solvency
CHH has an Altman-Z score of 3.70. This indicates that CHH is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.70, CHH belongs to the best of the industry, outperforming 85.29% of the companies in the same industry.
The Debt to FCF ratio of CHH is 10.19, which is on the high side as it means it would take CHH, 10.19 years of fcf income to pay off all of its debts.
CHH has a Debt to FCF ratio (10.19) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 10.19 | ||
| Altman-Z | 3.7 |
ROIC/WACC2.26
WACC8.14%
2.3 Liquidity
A Current Ratio of 0.73 indicates that CHH may have some problems paying its short term obligations.
With a Current ratio value of 0.73, CHH is not doing good in the industry: 60.29% of the companies in the same industry are doing better.
A Quick Ratio of 0.73 indicates that CHH may have some problems paying its short term obligations.
CHH has a Quick ratio (0.73) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
CHH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.56%, which is quite good.
CHH shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.82% yearly.
The Revenue for CHH has decreased by -15.56% in the past year. This is quite bad
CHH shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.29% yearly.
EPS 1Y (TTM)12.56%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%7.64%
Revenue 1Y (TTM)-15.56%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%-47.27%
3.2 Future
Based on estimates for the next years, CHH will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.96% on average per year.
The Revenue is expected to grow by 5.11% on average over the next years.
EPS Next Y3.61%
EPS Next 2Y5.51%
EPS Next 3Y5.18%
EPS Next 5Y8.96%
Revenue Next Year1.83%
Revenue Next 2Y2.76%
Revenue Next 3Y4.53%
Revenue Next 5Y5.11%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.21, the valuation of CHH can be described as rather expensive.
69.85% of the companies in the same industry are more expensive than CHH, based on the Price/Earnings ratio.
CHH is valuated rather cheaply when we compare the Price/Earnings ratio to 27.85, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.58, which indicates a rather expensive current valuation of CHH.
Based on the Price/Forward Earnings ratio, CHH is valued a bit cheaper than 65.44% of the companies in the same industry.
CHH is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.77, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.21 | ||
| Fwd PE | 17.58 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CHH is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as CHH.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.8 | ||
| EV/EBITDA | 13.37 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of CHH may justify a higher PE ratio.
PEG (NY)5.04
PEG (5Y)1.86
EPS Next 2Y5.51%
EPS Next 3Y5.18%
5. Dividend
5.1 Amount
With a yearly dividend of 0.91%, CHH is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.85, CHH pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.91, CHH pays less dividend than the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
5.2 History
The dividend of CHH has a limited annual growth rate of 5.92%.
CHH has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)5.92%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
CHH pays out 18.61% of its income as dividend. This is a sustainable payout ratio.
The dividend of CHH is growing, but earnings are growing more, so the dividend growth is sustainable.
DP18.61%
EPS Next 2Y5.51%
EPS Next 3Y5.18%
125.68
-0.43 (-0.34%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners66.18%
Inst Owner Change0.03%
Ins Owners14.24%
Ins Owner Change1.43%
Market Cap5.87B
Analysts55.65
Price Target140.79 (12.02%)
Short Float %23.01%
Short Ratio13.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
Yearly Dividend1.15
Dividend Growth(5Y)5.92%
DP18.61%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.29%
Min EPS beat(2)3.34%
Max EPS beat(2)15.24%
EPS beat(4)3
Avg EPS beat(4)6.9%
Min EPS beat(4)-2.15%
Max EPS beat(4)15.24%
EPS beat(8)6
Avg EPS beat(8)5.43%
EPS beat(12)8
Avg EPS beat(12)5.42%
EPS beat(16)11
Avg EPS beat(16)7.73%
Revenue beat(2)0
Avg Revenue beat(2)-26.12%
Min Revenue beat(2)-49.91%
Max Revenue beat(2)-2.33%
Revenue beat(4)0
Avg Revenue beat(4)-14.54%
Min Revenue beat(4)-49.91%
Max Revenue beat(4)-1.68%
Revenue beat(8)2
Avg Revenue beat(8)-7.38%
Revenue beat(12)6
Avg Revenue beat(12)4.16%
Revenue beat(16)9
Avg Revenue beat(16)6.85%
PT rev (1m)-2.85%
PT rev (3m)1.68%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)-1.44%
EPS NY rev (1m)-0.52%
EPS NY rev (3m)1.23%
Revenue NQ rev (1m)-4.75%
Revenue NQ rev (3m)-3.2%
Revenue NY rev (1m)-3.58%
Revenue NY rev (3m)-1.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.21 | ||
| Fwd PE | 17.58 | ||
| P/S | 3.7 | ||
| P/FCF | 33.8 | ||
| P/OCF | 18.36 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.37 |
EPS(TTM)6.9
EY5.49%
EPS(NY)7.15
Fwd EY5.69%
FCF(TTM)3.72
FCFY2.96%
OCF(TTM)6.84
OCFY5.45%
SpS33.96
BVpS-0.97
TBVpS-24.63
PEG (NY)5.04
PEG (5Y)1.86
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.78% | ||
| ROE | N/A | ||
| ROCE | 24.12% | ||
| ROIC | 18.38% | ||
| ROICexc | 18.75% | ||
| ROICexgc | 41.17% | ||
| OM | 31.47% | ||
| PM (TTM) | 18.81% | ||
| GM | 52.2% | ||
| FCFM | 10.95% |
ROA(3y)12.74%
ROA(5y)11.57%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.54%
ROIC(5y)19.3%
ROICexc(3y)22%
ROICexc(5y)22.8%
ROICexgc(3y)62.24%
ROICexgc(5y)57.93%
ROCE(3y)28.26%
ROCE(5y)25.31%
ROICexcg growth 3Y-22.85%
ROICexcg growth 5Y-2.05%
ROICexc growth 3Y-22.26%
ROICexc growth 5Y-6.09%
OM growth 3Y-8.9%
OM growth 5Y0.28%
PM growth 3Y-11.25%
PM growth 5Y-1.09%
GM growth 3Y-3.67%
GM growth 5Y1.67%
F-Score6
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 10.19 | ||
| Debt/EBITDA | 3.11 | ||
| Cap/Depr | 205.83% | ||
| Cap/Sales | 9.2% | ||
| Interest Coverage | 7.42 | ||
| Cash Conversion | 56.08% | ||
| Profit Quality | 58.21% | ||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.73 | ||
| Altman-Z | 3.7 |
F-Score6
WACC8.14%
ROIC/WACC2.26
Cap/Depr(3y)224.18%
Cap/Depr(5y)224.46%
Cap/Sales(3y)7.9%
Cap/Sales(5y)7.1%
Profit Quality(3y)70.03%
Profit Quality(5y)83.3%
High Growth Momentum
Growth
EPS 1Y (TTM)12.56%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%7.64%
EPS Next Y3.61%
EPS Next 2Y5.51%
EPS Next 3Y5.18%
EPS Next 5Y8.96%
Revenue 1Y (TTM)-15.56%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%-47.27%
Revenue Next Year1.83%
Revenue Next 2Y2.76%
Revenue Next 3Y4.53%
Revenue Next 5Y5.11%
EBIT growth 1Y-11.51%
EBIT growth 3Y3.87%
EBIT growth 5Y7.59%
EBIT Next Year32.51%
EBIT Next 3Y11.39%
EBIT Next 5Y9.39%
FCF growth 1Y-2.64%
FCF growth 3Y-17.21%
FCF growth 5Y35.78%
OCF growth 1Y7.7%
OCF growth 3Y-5.93%
OCF growth 5Y3.37%