CHOICE HOTELS INTL INC (CHH) Stock Fundamental Analysis
NYSE:CHH - New York Stock Exchange, Inc. - US1699051066 - Common Stock - Currency: USD
CHH gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 134 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
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 has a Return On Assets of 12.09%. This is amongst the best in the industry. CHH outperforms 88.06% of its industry peers.
CHH has a better Return On Invested Capital (17.27%) than 87.31% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CHH is significantly above the industry average of 14.01%.
The 3 year average ROIC (21.54%) for CHH is well above the current ROIC(17.27%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.09% | ||
| ROE | N/A | ||
| ROIC | 17.27% |
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 (19.65%) is better than 94.03% of its industry peers.
CHH's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 30.71%, CHH belongs to the top of the industry, outperforming 97.01% of the companies in the same industry.
CHH's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 54.33%, CHH is doing good in the industry, outperforming 64.93% of the companies in the same industry.
CHH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.71% | ||
| PM (TTM) | 19.65% | ||
| GM | 54.33% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CHH is creating value.
The number of shares outstanding for CHH has been reduced compared to 1 year ago.
Compared to 5 years ago, CHH has less shares outstanding
Compared to 1 year ago, CHH has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.61 indicates that CHH is not in any danger for bankruptcy at the moment.
The Altman-Z score of CHH (3.61) is better than 82.84% of its industry peers.
The Debt to FCF ratio of CHH is 10.39, which is on the high side as it means it would take CHH, 10.39 years of fcf income to pay off all of its debts.
CHH's Debt to FCF ratio of 10.39 is fine compared to the rest of the industry. CHH outperforms 61.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 10.39 | ||
| Altman-Z | 3.61 |
ROIC/WACC2.25
WACC7.69%
2.3 Liquidity
A Current Ratio of 0.84 indicates that CHH may have some problems paying its short term obligations.
With a Current ratio value of 0.84, CHH perfoms like the industry average, outperforming 45.52% of the companies in the same industry.
A Quick Ratio of 0.84 indicates that CHH may have some problems paying its short term obligations.
CHH has a Quick ratio of 0.84. This is comparable to the rest of the industry: CHH outperforms 48.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 |
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.
CHH shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -15.48%.
The Revenue has been growing slightly by 7.29% on average over the past years.
EPS 1Y (TTM)10.65%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%4.69%
Revenue 1Y (TTM)-15.48%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%0.27%
3.2 Future
CHH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.98% yearly.
CHH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.59% yearly.
EPS Next Y3.34%
EPS Next 2Y5.62%
EPS Next 3Y4.79%
EPS Next 5Y7.98%
Revenue Next Year2.01%
Revenue Next 2Y2.76%
Revenue Next 3Y3.43%
Revenue Next 5Y4.59%
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
CHH is valuated rather expensively with a Price/Earnings ratio of 17.74.
CHH's Price/Earnings ratio is a bit cheaper when compared to the industry. CHH is cheaper than 74.63% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.34, CHH is valued a bit cheaper.
The Price/Forward Earnings ratio is 16.04, which indicates a correct valuation of CHH.
CHH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CHH is cheaper than 66.42% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.19, CHH is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 16.04 |
4.2 Price Multiples
CHH's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as CHH.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.73 | ||
| EV/EBITDA | 13.37 |
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)5.3
PEG (5Y)1.81
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 3.59.
With a Dividend Yield of 0.90, CHH pays less dividend than the S&P500 average, which is at 2.40.
| 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.
The dividend of CHH decreased recently.
Dividend Growth(5Y)5.92%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
CHH pays out 17.41% 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.
DP17.41%
EPS Next 2Y5.62%
EPS Next 3Y4.79%
123.44
-1.08 (-0.87%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners69.7%
Inst Owner Change4.29%
Ins Owners15.41%
Ins Owner Change2.59%
Market Cap5.73B
Analysts70
Price Target136.87 (10.88%)
Short Float %22.71%
Short Ratio13.58
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
Yearly Dividend1.15
Dividend Growth(5Y)5.92%
DP17.41%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.18%
Min EPS beat(2)-2.98%
Max EPS beat(2)3.34%
EPS beat(4)2
Avg EPS beat(4)3.36%
Min EPS beat(4)-2.98%
Max EPS beat(4)15.24%
EPS beat(8)5
Avg EPS beat(8)3.84%
EPS beat(12)7
Avg EPS beat(12)3.98%
EPS beat(16)11
Avg EPS beat(16)7.87%
Revenue beat(2)0
Avg Revenue beat(2)-25.27%
Min Revenue beat(2)-49.91%
Max Revenue beat(2)-0.63%
Revenue beat(4)0
Avg Revenue beat(4)-13.64%
Min Revenue beat(4)-49.91%
Max Revenue beat(4)-0.63%
Revenue beat(8)1
Avg Revenue beat(8)-8%
Revenue beat(12)5
Avg Revenue beat(12)3.4%
Revenue beat(16)9
Avg Revenue beat(16)7.42%
PT rev (1m)-2.28%
PT rev (3m)-5.56%
EPS NQ rev (1m)1.17%
EPS NQ rev (3m)-1.54%
EPS NY rev (1m)0%
EPS NY rev (3m)0.01%
Revenue NQ rev (1m)4.8%
Revenue NQ rev (3m)-2.89%
Revenue NY rev (1m)1.82%
Revenue NY rev (3m)-3.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 16.04 | ||
| P/S | 3.61 | ||
| P/FCF | 31.73 | ||
| P/OCF | 16.94 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.37 |
EPS(TTM)6.96
EY5.64%
EPS(NY)7.7
Fwd EY6.24%
FCF(TTM)3.89
FCFY3.15%
OCF(TTM)7.29
OCFY5.9%
SpS34.18
BVpS-1.38
TBVpS-25.11
PEG (NY)5.3
PEG (5Y)1.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.09% | ||
| ROE | N/A | ||
| ROCE | 22.65% | ||
| ROIC | 17.27% | ||
| ROICexc | 17.59% | ||
| ROICexgc | 36.79% | ||
| OM | 30.71% | ||
| PM (TTM) | 19.65% | ||
| GM | 54.33% | ||
| FCFM | 11.38% |
ROA(3y)12.74%
ROA(5y)11.57%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.54%
ROIC(5y)19.3%
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 Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 10.39 | ||
| Debt/EBITDA | 3.31 | ||
| Cap/Depr | 200.66% | ||
| Cap/Sales | 9.94% | ||
| Interest Coverage | 6.1 | ||
| Cash Conversion | 59.78% | ||
| Profit Quality | 57.92% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 3.61 |
F-Score7
WACC7.69%
ROIC/WACC2.25
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 5Y7.98%
Revenue 1Y (TTM)-15.48%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%0.27%
Revenue Next Year2.01%
Revenue Next 2Y2.76%
Revenue Next 3Y3.43%
Revenue Next 5Y4.59%
EBIT growth 1Y-14.14%
EBIT growth 3Y3.87%
EBIT growth 5Y7.59%
EBIT Next Year31.18%
EBIT Next 3Y10.91%
EBIT Next 5Y8.67%
FCF growth 1Y-20.87%
FCF growth 3Y-17.21%
FCF growth 5Y35.78%
OCF growth 1Y7.28%
OCF growth 3Y-5.93%
OCF growth 5Y3.37%