SUNSTONE HOTEL INVESTORS INC (SHO) Stock Fundamental Analysis
NYSE:SHO - New York Stock Exchange, Inc. - US8678921011 - REIT - Currency: USD
SHO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 130 industry peers in the Diversified REITs industry. The financial health of SHO is average, but there are quite some concerns on its profitability. SHO does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
In the past year SHO was profitable.
In the past year SHO had a positive cash flow from operations.
SHO had positive earnings in 4 of the past 5 years.
Of the past 5 years SHO 4 years had a positive operating cash flow.
1.2 Ratios
SHO has a Return On Assets (0.89%) which is in line with its industry peers.
With a Return On Equity value of 1.32%, SHO perfoms like the industry average, outperforming 50.77% of the companies in the same industry.
The Return On Invested Capital of SHO (2.09%) is worse than 64.62% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SHO is in line with the industry average of 3.17%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.89% | ||
| ROE | 1.32% | ||
| ROIC | 2.09% |
ROA(3y)3.11%
ROA(5y)-0.84%
ROE(3y)4.55%
ROE(5y)-1.22%
ROIC(3y)2.7%
ROIC(5y)N/A
1.3 Margins
SHO has a Profit Margin (3.06%) which is in line with its industry peers.
SHO's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 8.68%, SHO is doing worse than 79.23% of the companies in the same industry.
In the last couple of years the Operating Margin of SHO has declined.
The Gross Margin of SHO (61.08%) is worse than 66.15% of its industry peers.
In the last couple of years the Gross Margin of SHO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.68% | ||
| PM (TTM) | 3.06% | ||
| GM | 61.08% |
OM growth 3YN/A
OM growth 5Y-9.81%
PM growth 3Y4.77%
PM growth 5Y-22.47%
GM growth 3Y-0.55%
GM growth 5Y-0.8%
2. Health
2.1 Basic Checks
SHO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SHO has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, SHO has less shares outstanding
Compared to 1 year ago, SHO has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.20, we must say that SHO is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.20, SHO belongs to the top of the industry, outperforming 83.08% of the companies in the same industry.
A Debt/Equity ratio of 0.40 indicates that SHO is not too dependend on debt financing.
SHO has a Debt to Equity ratio of 0.40. This is amongst the best in the industry. SHO outperforms 92.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.2 |
ROIC/WACC0.28
WACC7.59%
2.3 Liquidity
SHO has a Current Ratio of 1.51. This is a normal value and indicates that SHO is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.51, SHO is doing good in the industry, outperforming 65.38% of the companies in the same industry.
A Quick Ratio of 1.51 indicates that SHO should not have too much problems paying its short term obligations.
SHO has a Quick ratio of 1.51. This is in the better half of the industry: SHO outperforms 66.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.51 |
3. Growth
3.1 Past
The earnings per share for SHO have decreased strongly by -57.58% in the last year.
SHO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -23.38% yearly.
Looking at the last year, SHO shows a decrease in Revenue. The Revenue has decreased by -8.17% in the last year.
SHO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -4.07% yearly.
EPS 1Y (TTM)-57.58%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-102.62%
Revenue 1Y (TTM)-8.17%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%-2.03%
3.2 Future
Based on estimates for the next years, SHO will show a very strong growth in Earnings Per Share. The EPS will grow by 24.89% on average per year.
The Revenue is expected to grow by 4.03% on average over the next years.
EPS Next Y86.27%
EPS Next 2Y53.17%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue Next Year9.41%
Revenue Next 2Y6.21%
Revenue Next 3Y4.03%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
SHO is valuated quite expensively with a Price/Earnings ratio of 62.36.
61.54% of the companies in the same industry are cheaper than SHO, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.22. SHO is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 33.48, which means the current valuation is very expensive for SHO.
70.00% of the companies in the same industry are more expensive than SHO, based on the Price/Forward Earnings ratio.
SHO's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 20.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.36 | ||
| Fwd PE | 33.48 |
4.2 Price Multiples
SHO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SHO is cheaper than 66.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.26 |
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.
A more expensive valuation may be justified as SHO's earnings are expected to grow with 24.89% in the coming years.
PEG (NY)0.72
PEG (5Y)N/A
EPS Next 2Y53.17%
EPS Next 3Y24.89%
5. Dividend
5.1 Amount
SHO has a Yearly Dividend Yield of 4.25%, which is a nice return.
In the last 3 months the price of SHO has falen by -22.95%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 16.32, SHO is paying slightly less dividend.
SHO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.25% |
5.2 History
The dividend of SHO decreases each year by -9.74%.
SHO has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of SHO decreased in the last 3 years.
Dividend Growth(5Y)-9.74%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
SHO pays out 327.68% of its income as dividend. This is not a sustainable payout ratio.
DP327.68%
EPS Next 2Y53.17%
EPS Next 3Y24.89%
8.73
+0.26 (+3.07%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners101.38%
Inst Owner Change1.76%
Ins Owners1.18%
Ins Owner Change6.39%
Market Cap1.76B
Analysts73.33
Price Target10.43 (19.47%)
Short Float %6.95%
Short Ratio5.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.25% |
Yearly Dividend0.45
Dividend Growth(5Y)-9.74%
DP327.68%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-35.87%
Min EPS beat(2)-100%
Max EPS beat(2)28.25%
EPS beat(4)3
Avg EPS beat(4)628.1%
Min EPS beat(4)-100%
Max EPS beat(4)2575.25%
EPS beat(8)7
Avg EPS beat(8)424.1%
EPS beat(12)11
Avg EPS beat(12)329.08%
EPS beat(16)14
Avg EPS beat(16)243.33%
Revenue beat(2)1
Avg Revenue beat(2)-0.96%
Min Revenue beat(2)-2.61%
Max Revenue beat(2)0.7%
Revenue beat(4)2
Avg Revenue beat(4)-0.89%
Min Revenue beat(4)-2.61%
Max Revenue beat(4)0.7%
Revenue beat(8)5
Avg Revenue beat(8)0.34%
Revenue beat(12)9
Avg Revenue beat(12)2.69%
Revenue beat(16)12
Avg Revenue beat(16)3.23%
PT rev (1m)-11.07%
PT rev (3m)-12.45%
EPS NQ rev (1m)250%
EPS NQ rev (3m)-1.55%
EPS NY rev (1m)38.07%
EPS NY rev (3m)4.96%
Revenue NQ rev (1m)-0.55%
Revenue NQ rev (3m)-1.82%
Revenue NY rev (1m)-1.08%
Revenue NY rev (3m)-0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.36 | ||
| Fwd PE | 33.48 | ||
| P/S | 1.94 | ||
| P/FCF | N/A | ||
| P/OCF | 10.31 | ||
| P/B | 0.83 | ||
| P/tB | 0.83 | ||
| EV/EBITDA | 12.26 |
EPS(TTM)0.14
EY1.6%
EPS(NY)0.26
Fwd EY2.99%
FCF(TTM)-0.29
FCFYN/A
OCF(TTM)0.85
OCFY9.7%
SpS4.5
BVpS10.46
TBVpS10.46
PEG (NY)0.72
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.89% | ||
| ROE | 1.32% | ||
| ROCE | 2.65% | ||
| ROIC | 2.09% | ||
| ROICexc | 2.17% | ||
| ROICexgc | 2.17% | ||
| OM | 8.68% | ||
| PM (TTM) | 3.06% | ||
| GM | 61.08% | ||
| FCFM | N/A |
ROA(3y)3.11%
ROA(5y)-0.84%
ROE(3y)4.55%
ROE(5y)-1.22%
ROIC(3y)2.7%
ROIC(5y)N/A
ROICexc(3y)2.94%
ROICexc(5y)N/A
ROICexgc(3y)2.94%
ROICexgc(5y)N/A
ROCE(3y)3.42%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-13.98%
ROICexc growth 3YN/A
ROICexc growth 5Y-13.98%
OM growth 3YN/A
OM growth 5Y-9.81%
PM growth 3Y4.77%
PM growth 5Y-22.47%
GM growth 3Y-0.55%
GM growth 5Y-0.8%
F-Score4
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.14 | ||
| Cap/Depr | 184.19% | ||
| Cap/Sales | 25.32% | ||
| Interest Coverage | 1.61 | ||
| Cash Conversion | 83.89% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.51 | ||
| Altman-Z | 1.2 |
F-Score4
WACC7.59%
ROIC/WACC0.28
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-57.58%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-102.62%
EPS Next Y86.27%
EPS Next 2Y53.17%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue 1Y (TTM)-8.17%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%-2.03%
Revenue Next Year9.41%
Revenue Next 2Y6.21%
Revenue Next 3Y4.03%
Revenue Next 5YN/A
EBIT growth 1Y-33.78%
EBIT growth 3YN/A
EBIT growth 5Y-13.48%
EBIT Next Year221.31%
EBIT Next 3Y51.43%
EBIT Next 5YN/A
FCF growth 1Y-129.75%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-14.01%
OCF growth 3Y81.77%
OCF growth 5Y-10.15%