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 129 industry peers in the Diversified REITs industry. There are concerns on the financial health of DRH while its profitability can be described as average. DRH is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year DRH was profitable.
In the past year DRH had a positive cash flow from operations.
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
With a decent Return On Assets value of 1.21%, DRH is doing good in the industry, outperforming 60.47% of the companies in the same industry.
With a Return On Equity value of 2.40%, DRH perfoms like the industry average, outperforming 55.81% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.04%, DRH is doing good in the industry, outperforming 76.74% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DRH is in line with the industry average of 3.17%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.21% | ||
| ROE | 2.4% | ||
| ROIC | 4.04% |
ROA(3y)2.22%
ROA(5y)-2.57%
ROE(3y)4.44%
ROE(5y)-4.68%
ROIC(3y)4.14%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 3.38%, DRH is in line with its industry, outperforming 49.61% of the companies in the same industry.
DRH's Profit Margin has declined in the last couple of years.
DRH has a worse Operating Margin (12.85%) than 71.32% of its industry peers.
DRH's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 27.58%, DRH is doing worse than 90.70% of the companies in the same industry.
In the last couple of years the Gross Margin of DRH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.85% | ||
| PM (TTM) | 3.38% | ||
| GM | 27.58% |
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.
The debt/assets ratio for DRH has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.77, we must say that DRH is in the distress zone and has some risk of bankruptcy.
DRH has a better Altman-Z score (0.77) than 65.89% of its industry peers.
The Debt to FCF ratio of DRH is 9.75, which is on the high side as it means it would take DRH, 9.75 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DRH (9.75) is better than 92.25% of its industry peers.
DRH has a Debt/Equity ratio of 0.69. This is a neutral value indicating DRH is somewhat dependend on debt financing.
DRH has a Debt to Equity ratio of 0.69. This is in the better half of the industry: DRH outperforms 77.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 9.75 | ||
| Altman-Z | 0.77 |
ROIC/WACC0.55
WACC7.34%
2.3 Liquidity
DRH has a Current Ratio of 0.68. 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 0.68 is on the low side compared to the rest of the industry. DRH is outperformed by 62.79% of its industry peers.
DRH has a Quick Ratio of 0.68. This is a bad value and indicates that DRH is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.68, DRH is doing worse than 62.02% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
DRH shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.33%.
The earnings per share for DRH have been decreasing by -28.50% on average. This is quite bad
DRH shows a small growth in Revenue. In the last year, the Revenue has grown by 5.12%.
The Revenue has been growing slightly by 3.79% on average over the past years.
EPS 1Y (TTM)-8.33%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%533.33%
Revenue 1Y (TTM)5.12%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-0.61%
3.2 Future
The Earnings Per Share is expected to grow by 46.57% 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 2.19% on average per year.
EPS Next Y164.38%
EPS Next 2Y66.21%
EPS Next 3Y46.57%
EPS Next 5YN/A
Revenue Next Year0.35%
Revenue Next 2Y1.36%
Revenue Next 3Y2.19%
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
The Price/Earnings ratio is 23.00, which indicates a rather expensive current valuation of DRH.
68.99% of the companies in the same industry are more expensive than DRH, based on the Price/Earnings ratio.
DRH's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.10.
Based on the Price/Forward Earnings ratio of 16.16, the valuation of DRH can be described as correct.
Based on the Price/Forward Earnings ratio, DRH is valued cheaper than 95.35% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of DRH to the average of the S&P500 Index (20.74), we can say DRH is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23 | ||
| Fwd PE | 16.16 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DRH is valued cheaper than 81.40% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DRH is valued cheaply inside the industry as 82.17% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.11 | ||
| EV/EBITDA | 10.07 |
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 46.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.14
PEG (5Y)N/A
EPS Next 2Y66.21%
EPS Next 3Y46.57%
5. Dividend
5.1 Amount
DRH has a Yearly Dividend Yield of 2.89%. Purely for dividend investing, there may be better candidates out there.
With a Dividend Yield of 2.89, DRH pays less dividend than the industry average, which is at 6.64. 80.62% 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 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
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.
DRH has decreased its dividend recently.
Dividend Growth(5Y)-19.57%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
92.64% of the earnings are spent on dividend by DRH. This is not a sustainable payout ratio.
DP92.64%
EPS Next 2Y66.21%
EPS Next 3Y46.57%
7.59
-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 Owners108.56%
Inst Owner Change0.34%
Ins Owners0.76%
Ins Owner Change4.66%
Market Cap1.58B
Analysts75
Price Target9.53 (25.56%)
Short Float %7.98%
Short Ratio5.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
Yearly Dividend0.17
Dividend Growth(5Y)-19.57%
DP92.64%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-104.23%
Min EPS beat(2)-195.6%
Max EPS beat(2)-12.87%
EPS beat(4)1
Avg EPS beat(4)-54.76%
Min EPS beat(4)-195.6%
Max EPS beat(4)32.01%
EPS beat(8)2
Avg EPS beat(8)-30.18%
EPS beat(12)4
Avg EPS beat(12)-1.91%
EPS beat(16)7
Avg EPS beat(16)2.56%
Revenue beat(2)1
Avg Revenue beat(2)0.02%
Min Revenue beat(2)-1.53%
Max Revenue beat(2)1.57%
Revenue beat(4)3
Avg Revenue beat(4)0.88%
Min Revenue beat(4)-1.53%
Max Revenue beat(4)2%
Revenue beat(8)5
Avg Revenue beat(8)0.63%
Revenue beat(12)9
Avg Revenue beat(12)1.84%
Revenue beat(16)13
Avg Revenue beat(16)3.42%
PT rev (1m)-7.74%
PT rev (3m)-9.27%
EPS NQ rev (1m)7.14%
EPS NQ rev (3m)2.26%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.32%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)-2.5%
Revenue NY rev (1m)-0.61%
Revenue NY rev (3m)-2.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23 | ||
| Fwd PE | 16.16 | ||
| P/S | 1.4 | ||
| P/FCF | 14.11 | ||
| P/OCF | 7.06 | ||
| P/B | 1 | ||
| P/tB | 1 | ||
| EV/EBITDA | 10.07 |
EPS(TTM)0.33
EY4.35%
EPS(NY)0.47
Fwd EY6.19%
FCF(TTM)0.54
FCFY7.09%
OCF(TTM)1.07
OCFY14.16%
SpS5.41
BVpS7.62
TBVpS7.62
PEG (NY)0.14
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.21% | ||
| ROE | 2.4% | ||
| ROCE | 5.12% | ||
| ROIC | 4.04% | ||
| ROICexc | 4.16% | ||
| ROICexgc | 4.16% | ||
| OM | 12.85% | ||
| PM (TTM) | 3.38% | ||
| GM | 27.58% | ||
| FCFM | 9.94% |
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-Score6
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 9.75 | ||
| Debt/EBITDA | 4.23 | ||
| Cap/Depr | 98.71% | ||
| Cap/Sales | 9.92% | ||
| Interest Coverage | 2.28 | ||
| Cash Conversion | 86.74% | ||
| Profit Quality | 293.72% | ||
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 0.77 |
F-Score6
WACC7.34%
ROIC/WACC0.55
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)-8.33%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%533.33%
EPS Next Y164.38%
EPS Next 2Y66.21%
EPS Next 3Y46.57%
EPS Next 5YN/A
Revenue 1Y (TTM)5.12%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-0.61%
Revenue Next Year0.35%
Revenue Next 2Y1.36%
Revenue Next 3Y2.19%
Revenue Next 5YN/A
EBIT growth 1Y-3.08%
EBIT growth 3YN/A
EBIT growth 5Y7.52%
EBIT Next Year95.6%
EBIT Next 3Y26.43%
EBIT Next 5YN/A
FCF growth 1Y-3.79%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-5.54%
OCF growth 3YN/A
OCF growth 5Y3.03%