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. DRH has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
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.
The reported operating cash flow has been mixed in the past 5 years: DRH reported negative operating cash flow in multiple years.
1.2 Ratios
DRH's Return On Assets of 1.21% is in line compared to the rest of the industry. DRH outperforms 60.00% of its industry peers.
DRH has a Return On Equity (2.40%) which is comparable to the rest of the industry.
DRH's Return On Invested Capital of 4.04% is fine compared to the rest of the industry. DRH outperforms 76.92% 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 3.17%.
| 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 48.46% of the companies in the same industry.
DRH's Profit Margin has declined in the last couple of years.
DRH's Operating Margin of 12.85% is on the low side compared to the rest of the industry. DRH is outperformed by 70.77% of its industry peers.
DRH's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 27.58%, 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 | 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
DRH has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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 0.74. This is a bad value and indicates that DRH is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.74, DRH is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
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.
DRH's Debt to FCF ratio of 9.75 is amongst the best of the industry. DRH outperforms 91.54% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that DRH is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.69, DRH is in the better half of the industry, outperforming 76.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 9.75 | ||
| Altman-Z | 0.74 |
ROIC/WACC0.56
WACC7.26%
2.3 Liquidity
A Current Ratio of 0.68 indicates that DRH may have some problems paying its short term obligations.
DRH has a Current ratio of 0.68. This is in the lower half of the industry: DRH underperforms 62.31% 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.
With a Quick ratio value of 0.68, DRH is not doing good in the industry: 61.54% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
The earnings per share for DRH have decreased strongly by -52.78% 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.
Looking at the last year, DRH shows a small growth in Revenue. The Revenue has grown by 5.12% 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)-52.78%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%-275%
Revenue 1Y (TTM)5.12%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%5.88%
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
DRH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.19% yearly.
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
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
With a Price/Earnings ratio of 42.41, DRH can be considered very expensive at the moment.
DRH's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.78, DRH is valued a bit more expensive.
The Price/Forward Earnings ratio is 16.04, which indicates a correct valuation of DRH.
Based on the Price/Forward Earnings ratio, DRH is valued cheaper than 95.38% of the companies in the same industry.
DRH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.41 | ||
| Fwd PE | 16.04 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DRH is valued cheaper than 82.31% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DRH is valued cheaper than 81.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.41 | ||
| EV/EBITDA | 9.74 |
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 46.57% in the coming years.
PEG (NY)0.26
PEG (5Y)N/A
EPS Next 2Y66.21%
EPS Next 3Y46.57%
5. Dividend
5.1 Amount
DRH has a Yearly Dividend Yield of 2.39%.
With a Dividend Yield of 2.39, DRH pays less dividend than the industry average, which is at 16.32. 83.08% of the companies listed in the same industry pay a better dividend than DRH!
Compared to an average S&P500 Dividend Yield of 2.46, DRH has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
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 recently.
Dividend Growth(5Y)-19.57%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
DRH pays out 92.64% of its income as dividend. This is not a sustainable payout ratio.
DP92.64%
EPS Next 2Y66.21%
EPS Next 3Y46.57%
7.21
+0.09 (+1.26%)
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 Change-41.32%
Ins Owners0.76%
Ins Owner Change4.66%
Market Cap1.51B
Analysts71.25
Price Target9.53 (32.18%)
Short Float %8.44%
Short Ratio6.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
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)-9.09%
PT rev (3m)-9.27%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.55%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.3%
Revenue NQ rev (1m)-0.29%
Revenue NQ rev (3m)-2.28%
Revenue NY rev (1m)-1.64%
Revenue NY rev (3m)-2.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.41 | ||
| Fwd PE | 16.04 | ||
| P/S | 1.33 | ||
| P/FCF | 13.41 | ||
| P/OCF | 6.71 | ||
| P/B | 0.95 | ||
| P/tB | 0.95 | ||
| EV/EBITDA | 9.74 |
EPS(TTM)0.17
EY2.36%
EPS(NY)0.45
Fwd EY6.23%
FCF(TTM)0.54
FCFY7.46%
OCF(TTM)1.07
OCFY14.91%
SpS5.41
BVpS7.62
TBVpS7.62
PEG (NY)0.26
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 | 0.74 |
F-Score6
WACC7.26%
ROIC/WACC0.56
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)-52.78%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%-275%
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%5.88%
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%