DIAMONDROCK HOSPITALITY CO (DRH) Stock Fundamental Analysis
USA - NYSE:DRH - US2527843013 - REIT
7.73 USD
+0.08 (+1.05%)
7.73 USD
0 (0%)
Overall DRH gets a fundamental rating of 5 out of 10. We evaluated DRH against 129 industry peers in the Diversified REITs industry. DRH has only an average score on both its financial health and profitability. DRH may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
DRH had positive earnings in the past year.
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
With a decent Return On Assets value of 1.90%, DRH is doing good in the industry, outperforming 62.02% of the companies in the same industry.
Looking at the Return On Equity, with a value of 3.69%, DRH is in line with its industry, outperforming 59.69% of the companies in the same industry.
DRH has a better Return On Invested Capital (4.68%) than 89.92% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DRH is in line with the industry average of 3.01%.
The last Return On Invested Capital (4.68%) for DRH is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 3.69% | ||
| ROIC | 4.68% |
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 (5.16%) is comparable to the rest of the industry.
DRH's Profit Margin has declined in the last couple of years.
The Operating Margin of DRH (14.46%) is worse than 66.67% of its industry peers.
DRH's Operating Margin has improved in the last couple of years.
The Gross Margin of DRH (27.44%) is worse than 90.70% of its industry peers.
DRH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.46% | ||
| PM (TTM) | 5.16% | ||
| GM | 27.44% |
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.
Compared to 5 years ago, DRH has more shares outstanding
Compared to 1 year ago, DRH has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.84, we must say that DRH is in the distress zone and has some risk of bankruptcy.
DRH has a Altman-Z score of 0.84. This is in the better half of the industry: DRH outperforms 69.77% of its industry peers.
The Debt to FCF ratio of DRH is 8.43, which is on the high side as it means it would take DRH, 8.43 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.43, DRH belongs to the top of the industry, outperforming 93.02% of the companies in the same industry.
DRH has a Debt/Equity ratio of 0.65. This is a neutral value indicating DRH is somewhat dependend on debt financing.
DRH has a Debt to Equity ratio of 0.65. This is amongst the best in the industry. DRH outperforms 83.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 8.43 | ||
| Altman-Z | 0.84 |
ROIC/WACC0.68
WACC6.84%
2.3 Liquidity
DRH has a Current Ratio of 0.71. 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's Current ratio of 0.71 is on the low side compared to the rest of the industry. DRH is outperformed by 65.12% of its industry peers.
A Quick Ratio of 0.71 indicates that DRH may have some problems paying its short term obligations.
DRH has a worse Quick ratio (0.71) than 65.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
The earnings per share for DRH have decreased strongly by -10.34% in the last year.
Measured over the past years, DRH shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -28.50% on average per year.
DRH shows a small growth in Revenue. In the last year, the Revenue has grown by 1.72%.
The Revenue has been growing slightly by 3.79% on average over the past years.
EPS 1Y (TTM)-10.34%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%80%
Revenue 1Y (TTM)1.72%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-1.15%
3.2 Future
The Earnings Per Share is expected to grow by 45.64% on average over the next years. This is a very strong growth
Based on estimates for the next years, DRH will show a small growth in Revenue. The Revenue will grow by 1.68% on average per year.
EPS Next Y153.99%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue Next Year-0.79%
Revenue Next 2Y0.75%
Revenue Next 3Y1.68%
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 29.73.
DRH's Price/Earnings ratio is a bit cheaper when compared to the industry. DRH is cheaper than 64.34% of the companies in the same industry.
DRH is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.40, which is the current average of the S&P500 Index.
DRH is valuated correctly with a Price/Forward Earnings ratio of 16.64.
Based on the Price/Forward Earnings ratio, DRH is valued cheaper than 95.35% of the companies in the same industry.
DRH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.73 | ||
| Fwd PE | 16.64 |
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 89.92% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, DRH is valued cheaply inside the industry as 86.82% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.09 | ||
| EV/EBITDA | 9.19 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
DRH's earnings are expected to grow with 45.64% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.19
PEG (5Y)N/A
EPS Next 2Y65.32%
EPS Next 3Y45.64%
5. Dividend
5.1 Amount
DRH has a Yearly Dividend Yield of 3.52%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.99, DRH is paying slightly less dividend.
DRH's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
5.2 History
The dividend of DRH decreases each year by -19.57%.
DRH has been paying a dividend for at least 10 years, so it has a reliable track record.
DRH has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-19.57%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
DRH pays out 151.27% of its income as dividend. This is not a sustainable payout ratio.
DP151.27%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
7.73
+0.08 (+1.05%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners108.85%
Inst Owner Change-0.03%
Ins Owners0.99%
Ins Owner Change1.85%
Market Cap1.58B
Analysts75
Price Target9.32 (20.57%)
Short Float %6.81%
Short Ratio4.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
Yearly Dividend0.17
Dividend Growth(5Y)-19.57%
DP151.27%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.33%
Min EPS beat(2)-4.95%
Max EPS beat(2)5.61%
EPS beat(4)1
Avg EPS beat(4)-51.95%
Min EPS beat(4)-195.6%
Max EPS beat(4)5.61%
EPS beat(8)3
Avg EPS beat(8)-26.07%
EPS beat(12)3
Avg EPS beat(12)-24.65%
EPS beat(16)6
Avg EPS beat(16)-0.96%
Revenue beat(2)0
Avg Revenue beat(2)-0.9%
Min Revenue beat(2)-1.48%
Max Revenue beat(2)-0.32%
Revenue beat(4)1
Avg Revenue beat(4)-0.44%
Min Revenue beat(4)-1.53%
Max Revenue beat(4)1.57%
Revenue beat(8)4
Avg Revenue beat(8)0.47%
Revenue beat(12)7
Avg Revenue beat(12)0.55%
Revenue beat(16)11
Avg Revenue beat(16)2.17%
PT rev (1m)0.75%
PT rev (3m)1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.35%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.29%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.17%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.73 | ||
| Fwd PE | 16.64 | ||
| P/S | 1.41 | ||
| P/FCF | 13.09 | ||
| P/OCF | 6.64 | ||
| P/B | 1.01 | ||
| P/tB | 1.01 | ||
| EV/EBITDA | 9.19 |
EPS(TTM)0.26
EY3.36%
EPS(NY)0.46
Fwd EY6.01%
FCF(TTM)0.59
FCFY7.64%
OCF(TTM)1.16
OCFY15.06%
SpS5.49
BVpS7.69
TBVpS7.69
PEG (NY)0.19
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 3.69% | ||
| ROCE | 5.92% | ||
| ROIC | 4.68% | ||
| ROICexc | 4.77% | ||
| ROICexgc | 4.77% | ||
| OM | 14.46% | ||
| PM (TTM) | 5.16% | ||
| GM | 27.44% | ||
| FCFM | 10.76% |
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-Score8
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 8.43 | ||
| Debt/EBITDA | 3.7 | ||
| Cap/Depr | 103.67% | ||
| Cap/Sales | 10.46% | ||
| Interest Coverage | 2.68 | ||
| Cash Conversion | 86.45% | ||
| Profit Quality | 208.42% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 0.84 |
F-Score8
WACC6.84%
ROIC/WACC0.68
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)-10.34%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%80%
EPS Next Y153.99%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue 1Y (TTM)1.72%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-1.15%
Revenue Next Year-0.79%
Revenue Next 2Y0.75%
Revenue Next 3Y1.68%
Revenue Next 5YN/A
EBIT growth 1Y23.11%
EBIT growth 3YN/A
EBIT growth 5Y7.52%
EBIT Next Year91.3%
EBIT Next 3Y25.96%
EBIT Next 5YN/A
FCF growth 1Y51.2%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-2.67%
OCF growth 3YN/A
OCF growth 5Y3.03%