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 135 industry peers in the Hotels, Restaurants & Leisure industry. While CHH has a great profitability rating, there are some minor concerns on its financial health. CHH has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year CHH was profitable.
In the past year CHH had a positive cash flow from operations.
Each year in the past 5 years CHH has been profitable.
CHH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 11.78%, CHH belongs to the best of the industry, outperforming 88.15% of the companies in the same industry.
CHH's Return On Invested Capital of 18.38% is amongst the best of the industry. CHH outperforms 88.89% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CHH is significantly above the industry average of 14.12%.
| 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
The Profit Margin of CHH (18.81%) is better than 91.85% of its industry peers.
In the last couple of years the Profit Margin of CHH has remained more or less at the same level.
CHH has a better Operating Margin (31.47%) than 97.04% of its industry peers.
CHH's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 52.20%, CHH is in the better half of the industry, outperforming 61.48% of the companies in the same industry.
In the last couple of years the Gross Margin of CHH has grown nicely.
| 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.
CHH has less shares outstanding than it did 1 year ago.
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 3.71. This indicates that CHH is financially healthy and has little risk of bankruptcy at the moment.
CHH has a better Altman-Z score (3.71) than 84.44% of its industry peers.
CHH has a debt to FCF ratio of 10.19. This is a negative value and a sign of low solvency as CHH would need 10.19 years to pay back of all of its debts.
CHH has a Debt to FCF ratio (10.19) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 10.19 | ||
| Altman-Z | 3.71 |
ROIC/WACC2.15
WACC8.54%
2.3 Liquidity
A Current Ratio of 0.73 indicates that CHH may have some problems paying its short term obligations.
CHH's Current ratio of 0.73 is in line compared to the rest of the industry. CHH outperforms 40.74% of its industry peers.
A Quick Ratio of 0.73 indicates that CHH may have some problems paying its short term obligations.
With a Quick ratio value of 0.73, CHH perfoms like the industry average, outperforming 44.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.65% over the past year.
The Earnings Per Share has been growing by 9.82% on average over the past years. This is quite good.
Looking at the last year, CHH shows a small growth in Revenue. The Revenue has grown by 2.63% in the last year.
Measured over the past years, CHH shows a small growth in Revenue. The Revenue has been growing by 7.29% on average per year.
EPS 1Y (TTM)10.65%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%4.69%
Revenue 1Y (TTM)2.63%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%0.27%
3.2 Future
CHH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.96% yearly.
CHH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.11% yearly.
EPS Next Y3.34%
EPS Next 2Y5.62%
EPS Next 3Y4.79%
EPS Next 5Y8.96%
Revenue Next Year0.19%
Revenue Next 2Y1.93%
Revenue Next 3Y3.95%
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
The Price/Earnings ratio is 18.55, which indicates a rather expensive current valuation of CHH.
71.85% of the companies in the same industry are more expensive than CHH, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.91, CHH is valued a bit cheaper.
With a Price/Forward Earnings ratio of 16.77, CHH is valued correctly.
Based on the Price/Forward Earnings ratio, CHH is valued a bit cheaper than the industry average as 68.15% of the companies are valued more expensively.
CHH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.55 | ||
| Fwd PE | 16.77 |
4.2 Price Multiples
CHH's Enterprise Value to EBITDA ratio is in line with the industry average.
CHH's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.71 | ||
| EV/EBITDA | 13.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CHH does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of CHH may justify a higher PE ratio.
PEG (NY)5.54
PEG (5Y)1.89
EPS Next 2Y5.62%
EPS Next 3Y4.79%
5. Dividend
5.1 Amount
CHH has a yearly dividend return of 0.90%, which is pretty low.
CHH's Dividend Yield is a higher than the industry average which is at 3.57.
Compared to an average S&P500 Dividend Yield of 2.36, CHH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
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 2Y5.62%
EPS Next 3Y4.79%
129.08
+1.41 (+1.1%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners66.18%
Inst Owner Change4.26%
Ins Owners14.24%
Ins Owner Change1.4%
Market Cap6.02B
Analysts68.42
Price Target140.06 (8.51%)
Short Float %24.13%
Short Ratio14.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
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)-3.84%
PT rev (3m)1.51%
EPS NQ rev (1m)-0.95%
EPS NQ rev (3m)-1.22%
EPS NY rev (1m)-0.26%
EPS NY rev (3m)0.01%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-3.21%
Revenue NY rev (1m)-1.49%
Revenue NY rev (3m)-2.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.55 | ||
| Fwd PE | 16.77 | ||
| P/S | 3.8 | ||
| P/FCF | 34.71 | ||
| P/OCF | 18.86 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.5 |
EPS(TTM)6.96
EY5.39%
EPS(NY)7.7
Fwd EY5.96%
FCF(TTM)3.72
FCFY2.88%
OCF(TTM)6.84
OCFY5.3%
SpS33.96
BVpS-0.97
TBVpS-24.63
PEG (NY)5.54
PEG (5Y)1.89
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 | 3.71 |
F-Score6
WACC8.54%
ROIC/WACC2.15
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)10.65%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%4.69%
EPS Next Y3.34%
EPS Next 2Y5.62%
EPS Next 3Y4.79%
EPS Next 5Y8.96%
Revenue 1Y (TTM)2.63%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%0.27%
Revenue Next Year0.19%
Revenue Next 2Y1.93%
Revenue Next 3Y3.95%
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%