RLJ LODGING TRUST (RLJ) Stock Fundamental Analysis
NYSE:RLJ - New York Stock Exchange, Inc. - US74965L1017 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to RLJ. RLJ was compared to 130 industry peers in the Diversified REITs industry. While RLJ seems to be doing ok healthwise, there are quite some concerns on its profitability. RLJ is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year RLJ was profitable.
RLJ had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: RLJ reported negative net income in multiple years.
RLJ had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.84%, RLJ is in line with its industry, outperforming 55.38% of the companies in the same industry.
Looking at the Return On Equity, with a value of 1.80%, RLJ is in line with its industry, outperforming 51.54% of the companies in the same industry.
RLJ has a Return On Invested Capital (2.67%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for RLJ is in line with the industry average of 3.16%.
The last Return On Invested Capital (2.67%) for RLJ is above the 3 year average (2.42%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.84% | ||
| ROE | 1.8% | ||
| ROIC | 2.67% |
ROA(3y)0.74%
ROA(5y)-2.37%
ROE(3y)1.57%
ROE(5y)-5.03%
ROIC(3y)2.42%
ROIC(5y)N/A
1.3 Margins
RLJ has a Profit Margin of 2.93%. This is comparable to the rest of the industry: RLJ outperforms 48.46% of its industry peers.
RLJ's Profit Margin has declined in the last couple of years.
RLJ has a Operating Margin of 11.09%. This is in the lower half of the industry: RLJ underperforms 75.38% of its industry peers.
In the last couple of years the Operating Margin of RLJ has declined.
RLJ has a worse Gross Margin (35.80%) than 85.38% of its industry peers.
RLJ's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.09% | ||
| PM (TTM) | 2.93% | ||
| GM | 35.8% |
OM growth 3YN/A
OM growth 5Y-5.9%
PM growth 3YN/A
PM growth 5Y-13.88%
GM growth 3Y0.95%
GM growth 5Y-1.59%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RLJ is destroying value.
The number of shares outstanding for RLJ has been reduced compared to 1 year ago.
The number of shares outstanding for RLJ has been reduced compared to 5 years ago.
RLJ has a worse debt/assets ratio than last year.
2.2 Solvency
RLJ has an Altman-Z score of 0.36. This is a bad value and indicates that RLJ is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of RLJ (0.36) is worse than 60.00% of its industry peers.
RLJ has a debt to FCF ratio of 16.90. This is a negative value and a sign of low solvency as RLJ would need 16.90 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 16.90, RLJ belongs to the top of the industry, outperforming 83.85% of the companies in the same industry.
A Debt/Equity ratio of 0.99 indicates that RLJ is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.99, RLJ perfoms like the industry average, outperforming 59.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 16.9 | ||
| Altman-Z | 0.36 |
ROIC/WACC0.4
WACC6.62%
2.3 Liquidity
A Current Ratio of 1.40 indicates that RLJ should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.40, RLJ is doing good in the industry, outperforming 70.00% of the companies in the same industry.
RLJ has a Quick Ratio of 1.40. This is a normal value and indicates that RLJ is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.40, RLJ is doing good in the industry, outperforming 70.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.4 | ||
| Quick Ratio | 1.4 |
3. Growth
3.1 Past
The earnings per share for RLJ have decreased strongly by -10.71% in the last year.
RLJ shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -14.76% yearly.
RLJ shows a small growth in Revenue. In the last year, the Revenue has grown by 2.82%.
The Revenue has been decreasing by -2.65% on average over the past years.
EPS 1Y (TTM)-10.71%
EPS 3YN/A
EPS 5Y-14.76%
EPS Q2Q%-200%
Revenue 1Y (TTM)2.82%
Revenue growth 3Y20.35%
Revenue growth 5Y-2.65%
Sales Q2Q%1.14%
3.2 Future
The Earnings Per Share is expected to decrease by -54.64% on average over the next years. This is quite bad
The Revenue is expected to grow by 2.59% on average over the next years.
EPS Next Y-80.36%
EPS Next 2Y-54.64%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year0.15%
Revenue Next 2Y0.87%
Revenue Next 3Y2.59%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
A Price/Earnings ratio of 28.88 indicates a quite expensive valuation of RLJ.
Based on the Price/Earnings ratio, RLJ is valued a bit cheaper than the industry average as 66.15% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.82. RLJ is around the same levels.
The Price/Forward Earnings ratio is 129.97, which means the current valuation is very expensive for RLJ.
The rest of the industry has a similar Price/Forward Earnings ratio as RLJ.
When comparing the Price/Forward Earnings ratio of RLJ to the average of the S&P500 Index (36.21), we can say RLJ is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.88 | ||
| Fwd PE | 129.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RLJ is valued cheaper than 90.00% of the companies in the same industry.
93.85% of the companies in the same industry are more expensive than RLJ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.33 | ||
| EV/EBITDA | 9 |
4.3 Compensation for Growth
A cheap valuation may be justified as RLJ's earnings are expected to decrease with -54.64% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-54.64%
EPS Next 3YN/A
5. Dividend
5.1 Amount
RLJ has a Yearly Dividend Yield of 7.99%, which is a nice return.
Compared to an average industry Dividend Yield of 6.52, RLJ pays a bit more dividend than its industry peers.
RLJ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.99% |
5.2 History
The dividend of RLJ decreases each year by -16.05%.
RLJ has been paying a dividend for at least 10 years, so it has a reliable track record.
RLJ has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-16.05%
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
255.98% of the earnings are spent on dividend by RLJ. This is not a sustainable payout ratio.
The Dividend Rate of RLJ has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP255.98%
EPS Next 2Y-54.64%
EPS Next 3YN/A
7.22
-0.18 (-2.43%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners94.32%
Inst Owner Change0.15%
Ins Owners2.95%
Ins Owner Change9.4%
Market Cap1.10B
Analysts70
Price Target9.47 (31.16%)
Short Float %8.8%
Short Ratio8.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.99% |
Yearly Dividend0.62
Dividend Growth(5Y)-16.05%
DP255.98%
Div Incr Years3
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)54.46%
Min EPS beat(2)32.49%
Max EPS beat(2)76.43%
EPS beat(4)4
Avg EPS beat(4)901.88%
Min EPS beat(4)32.49%
Max EPS beat(4)3464.36%
EPS beat(8)8
Avg EPS beat(8)533.23%
EPS beat(12)12
Avg EPS beat(12)406.71%
EPS beat(16)14
Avg EPS beat(16)274.59%
Revenue beat(2)1
Avg Revenue beat(2)-0.14%
Min Revenue beat(2)-0.87%
Max Revenue beat(2)0.59%
Revenue beat(4)1
Avg Revenue beat(4)-0.13%
Min Revenue beat(4)-0.87%
Max Revenue beat(4)0.59%
Revenue beat(8)3
Avg Revenue beat(8)0.06%
Revenue beat(12)6
Avg Revenue beat(12)0.27%
Revenue beat(16)10
Avg Revenue beat(16)0.64%
PT rev (1m)1.37%
PT rev (3m)-7.48%
EPS NQ rev (1m)13.33%
EPS NQ rev (3m)-30.14%
EPS NY rev (1m)0%
EPS NY rev (3m)-64.04%
Revenue NQ rev (1m)-0.31%
Revenue NQ rev (3m)-2.77%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-1.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.88 | ||
| Fwd PE | 129.97 | ||
| P/S | 0.8 | ||
| P/FCF | 8.33 | ||
| P/OCF | 3.9 | ||
| P/B | 0.49 | ||
| P/tB | 0.49 | ||
| EV/EBITDA | 9 |
EPS(TTM)0.25
EY3.46%
EPS(NY)0.06
Fwd EY0.77%
FCF(TTM)0.87
FCFY12%
OCF(TTM)1.85
OCFY25.65%
SpS9.05
BVpS14.73
TBVpS14.73
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.84% | ||
| ROE | 1.8% | ||
| ROCE | 3.38% | ||
| ROIC | 2.67% | ||
| ROICexc | 2.89% | ||
| ROICexgc | 2.89% | ||
| OM | 11.09% | ||
| PM (TTM) | 2.93% | ||
| GM | 35.8% | ||
| FCFM | 9.57% |
ROA(3y)0.74%
ROA(5y)-2.37%
ROE(3y)1.57%
ROE(5y)-5.03%
ROIC(3y)2.42%
ROIC(5y)N/A
ROICexc(3y)2.7%
ROICexc(5y)N/A
ROICexgc(3y)2.7%
ROICexgc(5y)N/A
ROCE(3y)3.07%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-6.39%
ROICexc growth 3YN/A
ROICexc growth 5Y-6.39%
OM growth 3YN/A
OM growth 5Y-5.9%
PM growth 3YN/A
PM growth 5Y-13.88%
GM growth 3Y0.95%
GM growth 5Y-1.59%
F-Score5
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 16.9 | ||
| Debt/EBITDA | 6.67 | ||
| Cap/Depr | 82.8% | ||
| Cap/Sales | 10.89% | ||
| Interest Coverage | 1.45 | ||
| Cash Conversion | 84.4% | ||
| Profit Quality | 326.73% | ||
| Current Ratio | 1.4 | ||
| Quick Ratio | 1.4 | ||
| Altman-Z | 0.36 |
F-Score5
WACC6.62%
ROIC/WACC0.4
Cap/Depr(3y)83.09%
Cap/Depr(5y)81.14%
Cap/Sales(3y)11.78%
Cap/Sales(5y)15.84%
Profit Quality(3y)384.24%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-10.71%
EPS 3YN/A
EPS 5Y-14.76%
EPS Q2Q%-200%
EPS Next Y-80.36%
EPS Next 2Y-54.64%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)2.82%
Revenue growth 3Y20.35%
Revenue growth 5Y-2.65%
Sales Q2Q%1.14%
Revenue Next Year0.15%
Revenue Next 2Y0.87%
Revenue Next 3Y2.59%
Revenue Next 5YN/A
EBIT growth 1Y4.51%
EBIT growth 3YN/A
EBIT growth 5Y-8.39%
EBIT Next Year132.64%
EBIT Next 3Y35.6%
EBIT Next 5YN/A
FCF growth 1Y36.52%
FCF growth 3YN/A
FCF growth 5Y-9.09%
OCF growth 1Y-2.51%
OCF growth 3Y87.93%
OCF growth 5Y-6.4%