DIAMONDROCK HOSPITALITY CO (DRH) Stock Fundamental Analysis
NYSE:DRH - New York Stock Exchange, Inc. - US2527843013 - REIT - Currency: USD
Overall DRH gets a fundamental rating of 4 out of 10. We evaluated DRH against 130 industry peers in the Diversified REITs industry. Both the profitability and the financial health of DRH get a neutral evaluation. Nothing too spectacular is happening here. DRH is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year DRH was profitable.
DRH had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: DRH reported negative net income in multiple years.
In multiple years DRH reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.35%, DRH is in line with its industry, outperforming 60.00% of the companies in the same industry.
DRH has a Return On Equity (2.67%) which is comparable to the rest of the industry.
With a decent Return On Invested Capital value of 4.15%, DRH is doing good in the industry, outperforming 77.69% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DRH is in line with the industry average of 3.16%.
The last Return On Invested Capital (4.15%) for DRH is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 2.67% | ||
| ROIC | 4.15% |
ROA(3y)2.22%
ROA(5y)-2.57%
ROE(3y)4.44%
ROE(5y)-4.68%
ROIC(3y)4.14%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of DRH (3.70%) is comparable to the rest of the industry.
DRH's Profit Margin has declined in the last couple of years.
DRH's Operating Margin of 13.07% is on the low side compared to the rest of the industry. DRH is outperformed by 70.00% of its industry peers.
In the last couple of years the Operating Margin of DRH has grown nicely.
With a Gross Margin value of 27.68%, DRH is not doing good in the industry: 90.77% of the companies in the same industry are doing better.
DRH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.07% | ||
| PM (TTM) | 3.7% | ||
| GM | 27.68% |
OM growth 3YN/A
OM growth 5Y3.59%
PM growth 3YN/A
PM growth 5Y-29.59%
GM growth 3Y11.38%
GM growth 5Y1.6%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DRH is destroying value.
DRH has less shares outstanding than it did 1 year ago.
The number of shares outstanding for DRH has been increased compared to 5 years ago.
Compared to 1 year ago, DRH has an improved debt to assets ratio.
2.2 Solvency
DRH has an Altman-Z score of 0.84. This is a bad value and indicates that DRH is not financially healthy and even has some risk of bankruptcy.
DRH's Altman-Z score of 0.84 is fine compared to the rest of the industry. DRH outperforms 67.69% of its industry peers.
The Debt to FCF ratio of DRH is 10.72, which is on the high side as it means it would take DRH, 10.72 years of fcf income to pay off all of its debts.
DRH's Debt to FCF ratio of 10.72 is amongst the best of the industry. DRH outperforms 90.77% of its industry peers.
A Debt/Equity ratio of 0.70 indicates that DRH is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.70, DRH is in the better half of the industry, outperforming 78.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 10.72 | ||
| Altman-Z | 0.84 |
ROIC/WACC0.49
WACC8.55%
2.3 Liquidity
DRH has a Current Ratio of 0.89. This is a bad value and indicates that DRH is not financially healthy enough and could expect problems in meeting its short term obligations.
DRH has a Current ratio of 0.89. This is comparable to the rest of the industry: DRH outperforms 47.69% of its industry peers.
DRH has a Quick Ratio of 0.89. This is a bad value and indicates that DRH is not financially healthy enough and could expect problems in meeting its short term obligations.
DRH 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
DRH shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -50.00%.
The earnings per share for DRH have been decreasing by -28.50% on average. This is quite bad
Looking at the last year, DRH shows a small growth in Revenue. The Revenue has grown by 3.73% in the last year.
DRH shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.79% yearly.
EPS 1Y (TTM)-50%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%33.33%
Revenue 1Y (TTM)3.73%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-0.61%
3.2 Future
Based on estimates for the next years, DRH will show a very strong growth in Earnings Per Share. The EPS will grow by 45.64% on average per year.
Based on estimates for the next years, DRH will show a small growth in Revenue. The Revenue will grow by 2.35% on average per year.
EPS Next Y159.93%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue Next Year-0.53%
Revenue Next 2Y0.79%
Revenue Next 3Y2.35%
Revenue Next 5YN/A
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 accelerating.
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
DRH is valuated quite expensively with a Price/Earnings ratio of 44.44.
The rest of the industry has a similar Price/Earnings ratio as DRH.
DRH's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.45.
A Price/Forward Earnings ratio of 17.22 indicates a rather expensive valuation of DRH.
DRH's Price/Forward Earnings ratio is rather cheap when compared to the industry. DRH is cheaper than 94.62% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, DRH is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.44 | ||
| Fwd PE | 17.22 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DRH indicates a rather cheap valuation: DRH is cheaper than 82.31% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, DRH is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.19 | ||
| EV/EBITDA | 10.14 |
4.3 Compensation for Growth
DRH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as DRH's earnings are expected to grow with 45.64% in the coming years.
PEG (NY)0.28
PEG (5Y)N/A
EPS Next 2Y65.32%
EPS Next 3Y45.64%
5. Dividend
5.1 Amount
DRH has a Yearly Dividend Yield of 2.84%.
Compared to an average industry Dividend Yield of 6.64, DRH's dividend is way lower than its industry peers. On top of this 80.77% of the companies listed in the same industry pay a better dividend than DRH!
DRH's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
5.2 History
The dividend of DRH decreases each year by -19.57%.
DRH has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of DRH decreased in the last 3 years.
Dividend Growth(5Y)-19.57%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
185.63% of the earnings are spent on dividend by DRH. This is not a sustainable payout ratio.
DP185.63%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
8
+0.02 (+0.25%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners111.41%
Inst Owner Change2.3%
Ins Owners0.97%
Ins Owner Change6.16%
Market Cap1.65B
Analysts75
Price Target9.23 (15.38%)
Short Float %6.93%
Short Ratio4.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
Yearly Dividend0.17
Dividend Growth(5Y)-19.57%
DP185.63%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-94.99%
Min EPS beat(2)-195.6%
Max EPS beat(2)5.61%
EPS beat(4)1
Avg EPS beat(4)-61.36%
Min EPS beat(4)-195.6%
Max EPS beat(4)5.61%
EPS beat(8)3
Avg EPS beat(8)-26.26%
EPS beat(12)4
Avg EPS beat(12)-17.39%
EPS beat(16)7
Avg EPS beat(16)1.96%
Revenue beat(2)1
Avg Revenue beat(2)0.04%
Min Revenue beat(2)-1.48%
Max Revenue beat(2)1.57%
Revenue beat(4)2
Avg Revenue beat(4)0.01%
Min Revenue beat(4)-1.53%
Max Revenue beat(4)1.57%
Revenue beat(8)4
Avg Revenue beat(8)0.14%
Revenue beat(12)8
Avg Revenue beat(12)0.99%
Revenue beat(16)12
Avg Revenue beat(16)2.91%
PT rev (1m)-1.97%
PT rev (3m)-10.66%
EPS NQ rev (1m)2.7%
EPS NQ rev (3m)-1.3%
EPS NY rev (1m)1.16%
EPS NY rev (3m)-1.69%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-1.4%
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)-2.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.44 | ||
| Fwd PE | 17.22 | ||
| P/S | 1.46 | ||
| P/FCF | 16.19 | ||
| P/OCF | 7.48 | ||
| P/B | 1.05 | ||
| P/tB | 1.05 | ||
| EV/EBITDA | 10.14 |
EPS(TTM)0.18
EY2.25%
EPS(NY)0.46
Fwd EY5.81%
FCF(TTM)0.49
FCFY6.18%
OCF(TTM)1.07
OCFY13.38%
SpS5.47
BVpS7.59
TBVpS7.59
PEG (NY)0.28
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 2.67% | ||
| ROCE | 5.25% | ||
| ROIC | 4.15% | ||
| ROICexc | 4.31% | ||
| ROICexgc | 4.31% | ||
| OM | 13.07% | ||
| PM (TTM) | 3.7% | ||
| GM | 27.68% | ||
| FCFM | 9.04% |
ROA(3y)2.22%
ROA(5y)-2.57%
ROE(3y)4.44%
ROE(5y)-4.68%
ROIC(3y)4.14%
ROIC(5y)N/A
ROICexc(3y)4.27%
ROICexc(5y)N/A
ROICexgc(3y)4.27%
ROICexgc(5y)N/A
ROCE(3y)5.24%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y9.26%
ROICexc growth 3YN/A
ROICexc growth 5Y9.26%
OM growth 3YN/A
OM growth 5Y3.59%
PM growth 3YN/A
PM growth 5Y-29.59%
GM growth 3Y11.38%
GM growth 5Y1.6%
F-Score7
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 10.72 | ||
| Debt/EBITDA | 4.19 | ||
| Cap/Depr | 104.99% | ||
| Cap/Sales | 10.53% | ||
| Interest Coverage | 2.38 | ||
| Cash Conversion | 84.71% | ||
| Profit Quality | 244.18% | ||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 0.84 |
F-Score7
WACC8.55%
ROIC/WACC0.49
Cap/Depr(3y)145.53%
Cap/Depr(5y)112.1%
Cap/Sales(3y)15.36%
Cap/Sales(5y)16.86%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-50%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%33.33%
EPS Next Y159.93%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue 1Y (TTM)3.73%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-0.61%
Revenue Next Year-0.53%
Revenue Next 2Y0.79%
Revenue Next 3Y2.35%
Revenue Next 5YN/A
EBIT growth 1Y0.66%
EBIT growth 3YN/A
EBIT growth 5Y7.52%
EBIT Next Year91.51%
EBIT Next 3Y25.89%
EBIT Next 5YN/A
FCF growth 1Y83.39%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-12.09%
OCF growth 3YN/A
OCF growth 5Y3.03%