CHOICE HOTELS INTL INC (CHH) Stock Fundamental Analysis
USA - NYSE:CHH - US1699051066 - Common Stock
99.04 USD
-2.39 (-2.36%)
99.04 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to CHH. CHH was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. CHH has an excellent profitability rating, but 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.
CHH had a positive operating cash flow in the past year.
CHH had positive earnings in each of the past 5 years.
In the past 5 years CHH always reported a positive cash flow from operatings.
1.2 Ratios
CHH has a better Return On Assets (11.49%) than 88.15% of its industry peers.
Looking at the Return On Invested Capital, with a value of 16.45%, CHH belongs to the top of the industry, outperforming 84.44% of the companies in the same industry.
CHH had an Average Return On Invested Capital over the past 3 years of 21.54%. This is significantly above the industry average of 15.69%.
The last Return On Invested Capital (16.45%) for CHH is well below the 3 year average (21.54%), which needs to be investigated, but indicates that CHH had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.49% | ||
| ROE | N/A | ||
| ROIC | 16.45% |
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 19.42%, CHH belongs to the best of the industry, outperforming 93.33% 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.
With an excellent Operating Margin value of 30.28%, CHH belongs to the best of the industry, outperforming 96.30% of the companies in the same industry.
CHH's Operating Margin has been stable in the last couple of years.
The Gross Margin of CHH (55.90%) is better than 68.15% of its industry peers.
CHH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.28% | ||
| PM (TTM) | 19.42% | ||
| GM | 55.9% |
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.
Compared to 1 year ago, CHH has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.31 indicates that CHH is not in any danger for bankruptcy at the moment.
CHH has a Altman-Z score of 3.31. This is in the better half of the industry: CHH outperforms 76.30% of its industry peers.
CHH has a debt to FCF ratio of 11.36. This is a negative value and a sign of low solvency as CHH would need 11.36 years to pay back of all of its debts.
CHH's Debt to FCF ratio of 11.36 is in line compared to the rest of the industry. CHH outperforms 54.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 11.36 | ||
| Altman-Z | 3.31 |
ROIC/WACC2.22
WACC7.4%
2.3 Liquidity
CHH has a Current Ratio of 0.89. This is a bad value and indicates that CHH is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.89, CHH perfoms like the industry average, outperforming 50.37% of the companies in the same industry.
A Quick Ratio of 0.89 indicates that CHH may have some problems paying its short term obligations.
CHH has a Quick ratio (0.89) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.34% over the past year.
CHH shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.82% yearly.
Looking at the last year, CHH shows a small growth in Revenue. The Revenue has grown by 1.67% in the last year.
The Revenue has been growing slightly by 7.29% on average over the past years.
EPS 1Y (TTM)10.34%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%4.35%
Revenue 1Y (TTM)1.67%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%-2%
3.2 Future
The Earnings Per Share is expected to grow by 6.73% on average over the next years.
Based on estimates for the next years, CHH will show a small growth in Revenue. The Revenue will grow by 4.10% on average per year.
EPS Next Y3.64%
EPS Next 2Y4.34%
EPS Next 3Y4.37%
EPS Next 5Y6.73%
Revenue Next Year-0.31%
Revenue Next 2Y1.72%
Revenue Next 3Y2.64%
Revenue Next 5Y4.1%
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 decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 14.07 indicates a correct valuation of CHH.
CHH's Price/Earnings ratio is a bit cheaper when compared to the industry. CHH is cheaper than 80.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.55. CHH is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 13.19, which indicates a correct valuation of CHH.
Based on the Price/Forward Earnings ratio, CHH is valued a bit cheaper than 75.56% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.04. CHH is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.07 | ||
| Fwd PE | 13.19 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as CHH.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CHH indicates a somewhat cheap valuation: CHH is cheaper than 62.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.4 | ||
| EV/EBITDA | 11.89 |
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)3.86
PEG (5Y)1.43
EPS Next 2Y4.34%
EPS Next 3Y4.37%
5. Dividend
5.1 Amount
CHH has a Yearly Dividend Yield of 1.15%.
The stock price of CHH dropped by -24.63% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 6.98, CHH pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.15, CHH pays less dividend than the S&P500 average, which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
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.
The dividend of CHH decreased recently.
Dividend Growth(5Y)5.92%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
17.47% of the earnings are spent on dividend by CHH. This is a low number and sustainable payout ratio.
CHH's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP17.47%
EPS Next 2Y4.34%
EPS Next 3Y4.37%
99.04
-2.39 (-2.36%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners71.42%
Inst Owner Change-0.03%
Ins Owners15.44%
Ins Owner Change0.39%
Market Cap4.58B
Analysts55.45
Price Target131.75 (33.03%)
Short Float %20.5%
Short Ratio12.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
Yearly Dividend1.15
Dividend Growth(5Y)5.92%
DP17.47%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.51%
Min EPS beat(2)-2.98%
Max EPS beat(2)-0.04%
EPS beat(4)2
Avg EPS beat(4)3.89%
Min EPS beat(4)-2.98%
Max EPS beat(4)15.24%
EPS beat(8)4
Avg EPS beat(8)3.49%
EPS beat(12)7
Avg EPS beat(12)4.16%
EPS beat(16)10
Avg EPS beat(16)5.59%
Revenue beat(2)0
Avg Revenue beat(2)-1.46%
Min Revenue beat(2)-2.3%
Max Revenue beat(2)-0.63%
Revenue beat(4)0
Avg Revenue beat(4)-13.79%
Min Revenue beat(4)-49.91%
Max Revenue beat(4)-0.63%
Revenue beat(8)0
Avg Revenue beat(8)-8.42%
Revenue beat(12)4
Avg Revenue beat(12)-4.48%
Revenue beat(16)8
Avg Revenue beat(16)3.28%
PT rev (1m)-2.68%
PT rev (3m)-3.74%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.53%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)1.13%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.71%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.07 | ||
| Fwd PE | 13.19 | ||
| P/S | 2.91 | ||
| P/FCF | 27.4 | ||
| P/OCF | 14.24 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.89 |
EPS(TTM)7.04
EY7.11%
EPS(NY)7.51
Fwd EY7.58%
FCF(TTM)3.61
FCFY3.65%
OCF(TTM)6.96
OCFY7.02%
SpS34.08
BVpS-0.57
TBVpS-24.4
PEG (NY)3.86
PEG (5Y)1.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.49% | ||
| ROE | N/A | ||
| ROCE | 21.58% | ||
| ROIC | 16.45% | ||
| ROICexc | 16.9% | ||
| ROICexgc | 34.61% | ||
| OM | 30.28% | ||
| PM (TTM) | 19.42% | ||
| GM | 55.9% | ||
| FCFM | 10.61% |
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-Score7
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 11.36 | ||
| Debt/EBITDA | 3.46 | ||
| Cap/Depr | 215.05% | ||
| Cap/Sales | 9.8% | ||
| Interest Coverage | 6.9 | ||
| Cash Conversion | 58.59% | ||
| Profit Quality | 54.61% | ||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 3.31 |
F-Score7
WACC7.4%
ROIC/WACC2.22
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)10.34%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%4.35%
EPS Next Y3.64%
EPS Next 2Y4.34%
EPS Next 3Y4.37%
EPS Next 5Y6.73%
Revenue 1Y (TTM)1.67%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%-2%
Revenue Next Year-0.31%
Revenue Next 2Y1.72%
Revenue Next 3Y2.64%
Revenue Next 5Y4.1%
EBIT growth 1Y-0.47%
EBIT growth 3Y3.87%
EBIT growth 5Y7.59%
EBIT Next Year29.78%
EBIT Next 3Y11.46%
EBIT Next 5Y8.05%
FCF growth 1Y-31.59%
FCF growth 3Y-17.21%
FCF growth 5Y35.78%
OCF growth 1Y-3.47%
OCF growth 3Y-5.93%
OCF growth 5Y3.37%