DIAMONDROCK HOSPITALITY CO (DRH) Stock Fundamental Analysis
NYSE:DRH - New York Stock Exchange, Inc. - US2527843013 - REIT - Currency: USD
Taking everything into account, DRH scores 4 out of 10 in our fundamental rating. DRH was compared to 129 industry peers in the Diversified REITs industry. DRH has an average financial health and profitability rating. 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.
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 59.69% of the companies in the same industry.
Looking at the Return On Equity, with a value of 2.67%, DRH is in line with its industry, outperforming 57.36% 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 78.29% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DRH is in line with the industry average of 3.15%.
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
DRH has a Profit Margin (3.70%) which 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 (13.07%) is worse than 69.77% of its industry peers.
DRH's Operating Margin has improved in the last couple of years.
DRH's Gross Margin of 27.68% is on the low side compared to the rest of the industry. DRH is outperformed by 90.70% 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
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 0.82. This is a bad value and indicates that DRH is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of DRH (0.82) is better than 68.22% 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.
With an excellent Debt to FCF ratio value of 10.72, DRH belongs to the best of the industry, outperforming 90.70% of the companies in the same industry.
DRH has a Debt/Equity ratio of 0.70. This is a neutral value indicating 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 78.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 10.72 | ||
| Altman-Z | 0.82 |
ROIC/WACC0.57
WACC7.22%
2.3 Liquidity
A Current Ratio of 0.89 indicates that DRH may have some problems paying 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.
The Quick ratio of DRH (0.89) is comparable to the rest of the industry.
| 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%.
DRH shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -28.50% yearly.
DRH shows a small growth in Revenue. In the last year, the Revenue has grown by 3.73%.
The Revenue has been growing slightly by 3.79% on average over the past years.
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 38.79% yearly.
DRH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.33% yearly.
EPS Next Y156.96%
EPS Next 2Y62.6%
EPS Next 3Y38.79%
EPS Next 5YN/A
Revenue Next Year-0.09%
Revenue Next 2Y1.18%
Revenue Next 3Y2.33%
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 42.56, DRH can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of DRH is on the same level as its industry peers.
DRH is valuated expensively when we compare the Price/Earnings ratio to 26.35, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.04 indicates a rather expensive valuation of DRH.
94.57% 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 22.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.56 | ||
| Fwd PE | 17.04 |
4.2 Price Multiples
82.95% of the companies in the same industry are more expensive than DRH, based on the Enterprise Value to EBITDA ratio.
83.72% of the companies in the same industry are more expensive than DRH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.5 | ||
| EV/EBITDA | 9.89 |
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.
DRH's earnings are expected to grow with 38.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.27
PEG (5Y)N/A
EPS Next 2Y62.6%
EPS Next 3Y38.79%
5. Dividend
5.1 Amount
DRH has a Yearly Dividend Yield of 2.95%.
Compared to an average industry Dividend Yield of 6.93, DRH's dividend is way lower than its industry peers. On top of this 80.62% of the companies listed in the same industry pay a better dividend than DRH!
Compared to an average S&P500 Dividend Yield of 2.40, DRH pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
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
185.63% of the earnings are spent on dividend by DRH. This is not a sustainable payout ratio.
DP185.63%
EPS Next 2Y62.6%
EPS Next 3Y38.79%
NYSE:DRH (5/28/2025, 12:44:57 PM)
7.66
-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 Change2.3%
Ins Owners0.76%
Ins Owner Change6.16%
Market Cap1.58B
Analysts75
Price Target9.41 (22.85%)
Short Float %7.53%
Short Ratio4.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
Yearly Dividend0.17
Dividend Growth(5Y)-19.57%
DP185.63%
Div Incr Years1
Div Non Decr Years1
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)-7.94%
PT rev (3m)-11.42%
EPS NQ rev (1m)-3.9%
EPS NQ rev (3m)-11.9%
EPS NY rev (1m)-2.81%
EPS NY rev (3m)-5.98%
Revenue NQ rev (1m)-1.32%
Revenue NQ rev (3m)-3.78%
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)-2.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.56 | ||
| Fwd PE | 17.04 | ||
| P/S | 1.4 | ||
| P/FCF | 15.5 | ||
| P/OCF | 7.16 | ||
| P/B | 1.01 | ||
| P/tB | 1.01 | ||
| EV/EBITDA | 9.89 |
EPS(TTM)0.18
EY2.35%
EPS(NY)0.45
Fwd EY5.87%
FCF(TTM)0.49
FCFY6.45%
OCF(TTM)1.07
OCFY13.97%
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
WACC7.22%
ROIC/WACC0.57
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 Y156.96%
EPS Next 2Y62.6%
EPS Next 3Y38.79%
EPS Next 5YN/A
Revenue 1Y (TTM)3.73%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-0.61%
Revenue Next Year-0.09%
Revenue Next 2Y1.18%
Revenue Next 3Y2.33%
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%