DIAMONDROCK HOSPITALITY CO (DRH) Stock Fundamental Analysis
NYSE:DRH - New York Stock Exchange, Inc. - US2527843013 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to DRH. DRH was compared to 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 has a decent growth rate and is not valued too expensively.
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.
In multiple years DRH reported negative net income over the last 5 years.
In multiple years DRH reported negative operating cash flow during the last 5 years.
1.2 Ratios
DRH has a Return On Assets (1.35%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 2.67%, DRH is in line with its industry, outperforming 57.69% of the companies in the same industry.
DRH's Return On Invested Capital of 4.15% is fine compared to the rest of the industry. DRH outperforms 77.69% of its industry peers.
DRH had an Average Return On Invested Capital over the past 3 years of 4.14%. This is in line with the industry average of 3.16%.
The 3 year average ROIC (4.14%) for DRH is below the current ROIC(4.15%), indicating increased profibility in the last year.
| 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
DRH has a Profit Margin (3.70%) which is in line with its industry peers.
In the last couple of years the Profit Margin of DRH has declined.
DRH has a Operating Margin of 13.07%. This is in the lower half of the industry: DRH underperforms 70.00% of its industry peers.
DRH's Operating Margin has improved in the last couple of years.
DRH has a Gross Margin of 27.68%. This is amonst the worse of the industry: DRH underperforms 90.77% of its industry peers.
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
DRH has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for DRH has been reduced compared to 1 year ago.
The number of shares outstanding for DRH has been increased compared to 5 years ago.
The debt/assets ratio for DRH has been reduced compared to a year ago.
2.2 Solvency
DRH has an Altman-Z score of 0.82. This is a bad value and indicates that DRH is not financially healthy and even has some risk of bankruptcy.
DRH has a better Altman-Z score (0.82) than 67.69% of its industry peers.
DRH has a debt to FCF ratio of 10.72. This is a negative value and a sign of low solvency as DRH would need 10.72 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 10.72, DRH belongs to the best of the industry, outperforming 90.77% of the companies in the same industry.
A Debt/Equity ratio of 0.70 indicates that DRH is somewhat dependend on debt financing.
The Debt to Equity ratio of DRH (0.70) is better than 78.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 10.72 | ||
| Altman-Z | 0.82 |
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 (0.89) which is comparable to the rest of the industry.
A Quick Ratio of 0.89 indicates that DRH may have some problems paying its short term obligations.
With a Quick ratio value of 0.89, DRH perfoms like the industry average, outperforming 48.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
The earnings per share for DRH have decreased strongly by -50.00% 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 3.73%.
Measured over the past years, DRH shows a small growth in Revenue. The Revenue has been growing by 3.79% on average per year.
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
DRH is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 45.64% yearly.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 43.22 indicates a quite expensive valuation of DRH.
DRH's Price/Earnings ratio is in line with the industry average.
DRH's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.98.
Based on the Price/Forward Earnings ratio of 16.75, the valuation of DRH can be described as correct.
94.62% of the companies in the same industry are more expensive than DRH, based on the Price/Forward Earnings ratio.
DRH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.49.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.22 | ||
| Fwd PE | 16.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DRH is valued cheaply inside the industry as 82.31% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, DRH is valued cheaply inside the industry as 85.38% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.74 | ||
| EV/EBITDA | 9.97 |
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.
A more expensive valuation may be justified as DRH's earnings are expected to grow with 45.64% in the coming years.
PEG (NY)0.27
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%
7.78
+0.03 (+0.39%)
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 Cap1.61B
Analysts75
Price Target9.23 (18.64%)
Short Float %6.92%
Short Ratio4.87
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 | 43.22 | ||
| Fwd PE | 16.75 | ||
| P/S | 1.42 | ||
| P/FCF | 15.74 | ||
| P/OCF | 7.27 | ||
| P/B | 1.03 | ||
| P/tB | 1.03 | ||
| EV/EBITDA | 9.97 |
EPS(TTM)0.18
EY2.31%
EPS(NY)0.46
Fwd EY5.97%
FCF(TTM)0.49
FCFY6.35%
OCF(TTM)1.07
OCFY13.76%
SpS5.47
BVpS7.59
TBVpS7.59
PEG (NY)0.27
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 | 0.82 |
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%