INTERCONTINENTAL HOTELS-ADR (IHG) Stock Fundamental Analysis
NYSE:IHG - New York Stock Exchange, Inc. - US45857P8068 - ADR - Currency: USD
IHG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 131 industry peers in the Hotels, Restaurants & Leisure industry. While IHG has a great profitability rating, there are some minor concerns on its financial health. IHG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year IHG was profitable.
In the past year IHG had a positive cash flow from operations.
Of the past 5 years IHG 4 years were profitable.
IHG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
IHG has a better Return On Assets (13.23%) than 90.08% of its industry peers.
IHG has a Return On Invested Capital of 26.63%. This is amongst the best in the industry. IHG outperforms 96.18% of its industry peers.
IHG had an Average Return On Invested Capital over the past 3 years of 24.68%. This is significantly above the industry average of 15.73%.
The 3 year average ROIC (24.68%) for IHG is below the current ROIC(26.63%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.23% | ||
| ROE | N/A | ||
| ROIC | 26.63% |
ROA(3y)12.57%
ROA(5y)7.64%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)24.68%
ROIC(5y)17.64%
1.3 Margins
IHG has a Profit Margin of 12.76%. This is amongst the best in the industry. IHG outperforms 81.68% of its industry peers.
IHG's Profit Margin has improved in the last couple of years.
IHG has a better Operating Margin (21.15%) than 80.92% of its industry peers.
IHG's Operating Margin has improved in the last couple of years.
IHG has a Gross Margin of 29.56%. This is in the lower half of the industry: IHG underperforms 77.10% of its industry peers.
IHG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.15% | ||
| PM (TTM) | 12.76% | ||
| GM | 29.56% |
OM growth 3Y5.4%
OM growth 5Y3.86%
PM growth 3Y11.71%
PM growth 5Y8.92%
GM growth 3Y-1.28%
GM growth 5Y1.91%
2. Health
2.1 Basic Checks
IHG has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for IHG has been reduced compared to 1 year ago.
Compared to 5 years ago, IHG has less shares outstanding
Compared to 1 year ago, IHG has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.41 indicates that IHG is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.41, IHG is doing good in the industry, outperforming 62.60% of the companies in the same industry.
The Debt to FCF ratio of IHG is 5.71, which is a neutral value as it means it would take IHG, 5.71 years of fcf income to pay off all of its debts.
IHG has a Debt to FCF ratio of 5.71. This is in the better half of the industry: IHG outperforms 77.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 2.41 |
ROIC/WACC3.26
WACC8.18%
2.3 Liquidity
A Current Ratio of 0.97 indicates that IHG may have some problems paying its short term obligations.
IHG has a Current ratio of 0.97. This is comparable to the rest of the industry: IHG outperforms 52.67% of its industry peers.
A Quick Ratio of 0.97 indicates that IHG may have some problems paying its short term obligations.
The Quick ratio of IHG (0.97) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.99% over the past year.
IHG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.39% yearly.
The Revenue has been growing slightly by 6.47% in the past year.
Measured over the past years, IHG shows a small growth in Revenue. The Revenue has been growing by 1.25% on average per year.
EPS 1Y (TTM)14.99%
EPS 3Y43.24%
EPS 5Y7.39%
EPS Q2Q%18.32%
Revenue 1Y (TTM)6.47%
Revenue growth 3Y19.2%
Revenue growth 5Y1.25%
Sales Q2Q%6.27%
3.2 Future
The Earnings Per Share is expected to grow by 14.63% on average over the next years. This is quite good.
IHG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.87% yearly.
EPS Next Y17.18%
EPS Next 2Y15.15%
EPS Next 3Y14.28%
EPS Next 5Y14.63%
Revenue Next Year6.4%
Revenue Next 2Y6.25%
Revenue Next 3Y6.13%
Revenue Next 5Y7.87%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 25.41, which means the current valuation is very expensive for IHG.
IHG's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.24. IHG is around the same levels.
IHG is valuated rather expensively with a Price/Forward Earnings ratio of 21.69.
Compared to the rest of the industry, the Price/Forward Earnings ratio of IHG is on the same level as its industry peers.
IHG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.41 | ||
| Fwd PE | 21.69 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IHG is valued a bit more expensive than the industry average as 64.12% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of IHG indicates a somewhat cheap valuation: IHG is cheaper than 66.41% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.38 | ||
| EV/EBITDA | 18.31 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
IHG has an outstanding profitability rating, which may justify a higher PE ratio.
IHG's earnings are expected to grow with 14.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.48
PEG (5Y)3.44
EPS Next 2Y15.15%
EPS Next 3Y14.28%
5. Dividend
5.1 Amount
IHG has a Yearly Dividend Yield of 1.45%. Purely for dividend investing, there may be better candidates out there.
IHG's Dividend Yield is a higher than the industry average which is at 3.80.
IHG's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
5.2 History
The dividend of IHG decreases each year by -16.62%.
IHG has been paying a dividend for at least 10 years, so it has a reliable track record.
IHG has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-16.62%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
IHG pays out 41.24% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP41.24%
EPS Next 2Y15.15%
EPS Next 3Y14.28%
115.35
+0.68 (+0.59%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners69.35%
Inst Owner Change-0.97%
Ins Owners0.37%
Ins Owner ChangeN/A
Market Cap17.69B
Analysts51.67
Price Target122.56 (6.25%)
Short Float %0.88%
Short Ratio5.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
Yearly Dividend1.6
Dividend Growth(5Y)-16.62%
DP41.24%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-5.21%
PT rev (3m)-3.04%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.15%
EPS NY rev (3m)0.75%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.41 | ||
| Fwd PE | 21.69 | ||
| P/S | 3.59 | ||
| P/FCF | 27.38 | ||
| P/OCF | 24.43 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.31 |
EPS(TTM)4.54
EY3.94%
EPS(NY)5.32
Fwd EY4.61%
FCF(TTM)4.21
FCFY3.65%
OCF(TTM)4.72
OCFY4.09%
SpS32.11
BVpS-15.08
TBVpS-21.88
PEG (NY)1.48
PEG (5Y)3.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.23% | ||
| ROE | N/A | ||
| ROCE | 36.91% | ||
| ROIC | 26.63% | ||
| ROICexc | 41.6% | ||
| ROICexgc | 98.42% | ||
| OM | 21.15% | ||
| PM (TTM) | 12.76% | ||
| GM | 29.56% | ||
| FCFM | 13.12% |
ROA(3y)12.57%
ROA(5y)7.64%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)24.68%
ROIC(5y)17.64%
ROICexc(3y)42.58%
ROICexc(5y)30.73%
ROICexgc(3y)167.06%
ROICexgc(5y)116.93%
ROCE(3y)34.5%
ROCE(5y)24.84%
ROICexcg growth 3Y8.62%
ROICexcg growth 5Y17.19%
ROICexc growth 3Y22.74%
ROICexc growth 5Y13.9%
OM growth 3Y5.4%
OM growth 5Y3.86%
PM growth 3Y11.71%
PM growth 5Y8.92%
GM growth 3Y-1.28%
GM growth 5Y1.91%
F-Score5
Asset Turnover1.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.71 | ||
| Debt/EBITDA | 2.95 | ||
| Cap/Depr | 120% | ||
| Cap/Sales | 1.58% | ||
| Interest Coverage | 6.12 | ||
| Cash Conversion | 65.46% | ||
| Profit Quality | 102.87% | ||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 2.41 |
F-Score5
WACC8.18%
ROIC/WACC3.26
Cap/Depr(3y)129.32%
Cap/Depr(5y)97.04%
Cap/Sales(3y)1.97%
Cap/Sales(5y)2.17%
Profit Quality(3y)118.96%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)14.99%
EPS 3Y43.24%
EPS 5Y7.39%
EPS Q2Q%18.32%
EPS Next Y17.18%
EPS Next 2Y15.15%
EPS Next 3Y14.28%
EPS Next 5Y14.63%
Revenue 1Y (TTM)6.47%
Revenue growth 3Y19.2%
Revenue growth 5Y1.25%
Sales Q2Q%6.27%
Revenue Next Year6.4%
Revenue Next 2Y6.25%
Revenue Next 3Y6.13%
Revenue Next 5Y7.87%
EBIT growth 1Y1.66%
EBIT growth 3Y25.64%
EBIT growth 5Y5.15%
EBIT Next Year18.06%
EBIT Next 3Y11.15%
EBIT Next 5Y10.26%
FCF growth 1Y-20.35%
FCF growth 3Y3.42%
FCF growth 5Y6.39%
OCF growth 1Y-18.92%
OCF growth 3Y4.41%
OCF growth 5Y2.09%