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 132 industry peers in the Hotels, Restaurants & Leisure industry. CHH scores excellent on profitability, but there are some minor concerns on its financial health. CHH is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year CHH was profitable.
CHH had a positive operating cash flow in the past year.
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 12.09%, CHH belongs to the best of the industry, outperforming 87.88% of the companies in the same industry.
The Return On Invested Capital of CHH (17.27%) is better than 87.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CHH is significantly above the industry average of 13.91%.
The last Return On Invested Capital (17.27%) 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 | 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
CHH has a better Profit Margin (19.65%) than 93.18% 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's Operating Margin of 30.71% is amongst the best of the industry. CHH outperforms 96.97% of its industry peers.
CHH's Operating Margin has been stable in the last couple of years.
CHH's Gross Margin of 54.33% is fine compared to the rest of the industry. CHH outperforms 65.15% of its industry peers.
In the last couple of years the Gross Margin of CHH has grown nicely.
| 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
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 3.73. This indicates that CHH is financially healthy and has little risk of bankruptcy at the moment.
CHH's Altman-Z score of 3.73 is amongst the best of the industry. CHH outperforms 80.30% 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.
With a Debt to FCF ratio value of 10.39, CHH perfoms like the industry average, outperforming 59.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 10.39 | ||
| Altman-Z | 3.73 |
ROIC/WACC1.97
WACC8.76%
2.3 Liquidity
CHH has a Current Ratio of 0.84. This is a bad value and indicates that CHH is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.84, CHH is in line with its industry, outperforming 46.21% of the companies in the same industry.
CHH has a Quick Ratio of 0.84. This is a bad value and indicates that CHH is not financially healthy enough and could expect problems in meeting its short term obligations.
CHH has a Quick ratio (0.84) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
CHH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.65%, 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.
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 Y2.48%
EPS Next 2Y4.17%
EPS Next 3Y4.54%
EPS Next 5Y7.98%
Revenue Next Year1.2%
Revenue Next 2Y2.3%
Revenue Next 3Y3.27%
Revenue Next 5Y4.59%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 19.19 indicates a rather expensive valuation of CHH.
CHH's Price/Earnings ratio is a bit cheaper when compared to the industry. CHH is cheaper than 76.52% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.52. CHH is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 17.84, CHH is valued on the expensive side.
Based on the Price/Forward Earnings ratio, CHH is valued a bit cheaper than 68.18% of the companies in the same industry.
CHH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.58.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.19 | ||
| Fwd PE | 17.84 |
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.
CHH's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CHH is cheaper than 60.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.34 | ||
| EV/EBITDA | 14.28 |
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)7.73
PEG (5Y)1.95
EPS Next 2Y4.17%
EPS Next 3Y4.54%
5. Dividend
5.1 Amount
CHH has a yearly dividend return of 0.85%, which is pretty low.
Compared to an average industry Dividend Yield of 3.47, CHH pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, CHH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
5.2 History
The dividend of CHH has a limited annual growth rate of 5.92%.
CHH has paid a dividend for at least 10 years, which is a reliable track record.
CHH has decreased its dividend recently.
Dividend Growth(5Y)5.92%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
17.41% of the earnings are spent on dividend by CHH. This is a low number and sustainable payout ratio.
The dividend of CHH is growing, but earnings are growing more, so the dividend growth is sustainable.
DP17.41%
EPS Next 2Y4.17%
EPS Next 3Y4.54%
133.57
-0.93 (-0.69%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners69.7%
Inst Owner Change-0.02%
Ins Owners15.41%
Ins Owner Change2.4%
Market Cap6.20B
Analysts68.42
Price Target136.87 (2.47%)
Short Float %23.35%
Short Ratio14.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
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)0%
PT rev (3m)-6.03%
EPS NQ rev (1m)-1.11%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)-0.83%
EPS NY rev (3m)-1.6%
Revenue NQ rev (1m)-1.33%
Revenue NQ rev (3m)1.74%
Revenue NY rev (1m)-0.8%
Revenue NY rev (3m)-0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.19 | ||
| Fwd PE | 17.84 | ||
| P/S | 3.91 | ||
| P/FCF | 34.34 | ||
| P/OCF | 18.33 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.28 |
EPS(TTM)6.96
EY5.21%
EPS(NY)7.49
Fwd EY5.61%
FCF(TTM)3.89
FCFY2.91%
OCF(TTM)7.29
OCFY5.46%
SpS34.18
BVpS-1.38
TBVpS-25.11
PEG (NY)7.73
PEG (5Y)1.95
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 | 3.73 |
F-Score7
WACC8.76%
ROIC/WACC1.97
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 Y2.48%
EPS Next 2Y4.17%
EPS Next 3Y4.54%
EPS Next 5Y7.98%
Revenue 1Y (TTM)-15.48%
Revenue growth 3Y14.02%
Revenue growth 5Y7.29%
Sales Q2Q%0.27%
Revenue Next Year1.2%
Revenue Next 2Y2.3%
Revenue Next 3Y3.27%
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%