SUNSTONE HOTEL INVESTORS INC (SHO) Stock Fundamental Analysis
NYSE:SHO - New York Stock Exchange, Inc. - US8678921011 - REIT - Currency: USD
Taking everything into account, SHO scores 4 out of 10 in our fundamental rating. SHO was compared to 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 is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
SHO had positive earnings in the past year.
SHO had a positive operating cash flow in the past year.
Of the past 5 years SHO 4 years were profitable.
Of the past 5 years SHO 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.64%, SHO is in line with its industry, outperforming 50.77% of the companies in the same industry.
SHO has a Return On Equity (0.95%) which is in line with its industry peers.
With a Return On Invested Capital value of 2.09%, SHO is not doing good in the industry: 65.38% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital for SHO is in line with the industry average of 3.16%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.64% | ||
| ROE | 0.95% | ||
| 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
Looking at the Profit Margin, with a value of 2.14%, SHO is in line with its industry, outperforming 45.38% of the companies in the same industry.
SHO's Profit Margin has declined in the last couple of years.
SHO has a Operating Margin of 8.43%. This is amonst the worse of the industry: SHO underperforms 82.31% of its industry peers.
SHO's Operating Margin has declined in the last couple of years.
The Gross Margin of SHO (60.93%) is worse than 66.92% of its industry peers.
SHO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.43% | ||
| PM (TTM) | 2.14% | ||
| GM | 60.93% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SHO is destroying value.
Compared to 1 year ago, SHO has less shares outstanding
SHO has less shares outstanding than it did 5 years ago.
The debt/assets ratio for SHO is higher compared to a year ago.
2.2 Solvency
SHO has an Altman-Z score of 1.16. This is a bad value and indicates that SHO is not financially healthy and even has some risk of bankruptcy.
SHO has a better Altman-Z score (1.16) than 82.31% of its industry peers.
SHO has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SHO (0.41) is better than 93.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.16 |
ROIC/WACC0.24
WACC8.73%
2.3 Liquidity
A Current Ratio of 1.27 indicates that SHO should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.27, SHO is in the better half of the industry, outperforming 63.08% of the companies in the same industry.
SHO has a Quick Ratio of 1.27. This is a normal value and indicates that SHO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.27, SHO is in the better half of the industry, outperforming 63.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
The earnings per share for SHO have decreased strongly by -66.67% in the last year.
Measured over the past years, SHO shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -23.38% on average per year.
The Revenue has decreased by -3.90% in the past year.
SHO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -4.07% yearly.
EPS 1Y (TTM)-66.67%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-80%
Revenue 1Y (TTM)-3.9%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%7.78%
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.
Based on estimates for the next years, SHO will show a small growth in Revenue. The Revenue will grow by 4.03% on average per year.
EPS Next Y-1.4%
EPS Next 2Y19.21%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue Next Year7.13%
Revenue Next 2Y5.28%
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
With a Price/Earnings ratio of 88.40, SHO can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of SHO is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.21, SHO is valued quite expensively.
A Price/Forward Earnings ratio of 44.43 indicates a quite expensive valuation of SHO.
Based on the Price/Forward Earnings ratio, SHO is valued a bit cheaper than 60.77% of the companies in the same industry.
SHO is valuated expensively when we compare the Price/Forward Earnings ratio to 21.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.4 | ||
| Fwd PE | 44.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SHO indicates a somewhat cheap valuation: SHO is cheaper than 66.92% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.29 |
4.3 Compensation for Growth
A more expensive valuation may be justified as SHO's earnings are expected to grow with 24.89% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y19.21%
EPS Next 3Y24.89%
5. Dividend
5.1 Amount
SHO has a Yearly Dividend Yield of 4.05%, which is a nice return.
SHO's Dividend Yield is slightly below the industry average, which is at 6.64.
SHO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
5.2 History
The dividend of SHO decreases each year by -9.74%.
SHO has been paying a dividend for at least 10 years, so it has 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
427.55% of the earnings are spent on dividend by SHO. This is not a sustainable payout ratio.
DP427.55%
EPS Next 2Y19.21%
EPS Next 3Y24.89%
8.84
+0.16 (+1.84%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners102.02%
Inst Owner Change0.4%
Ins Owners1.21%
Ins Owner Change6.39%
Market Cap1.76B
Analysts74.29
Price Target10.05 (13.69%)
Short Float %7.39%
Short Ratio5.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
Yearly Dividend0.45
Dividend Growth(5Y)-9.74%
DP427.55%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)96.14%
Min EPS beat(2)28.25%
Max EPS beat(2)164.03%
EPS beat(4)3
Avg EPS beat(4)25.3%
Min EPS beat(4)-100%
Max EPS beat(4)164.03%
EPS beat(8)7
Avg EPS beat(8)358.09%
EPS beat(12)11
Avg EPS beat(12)329.11%
EPS beat(16)14
Avg EPS beat(16)252.57%
Revenue beat(2)1
Avg Revenue beat(2)-1.56%
Min Revenue beat(2)-3.82%
Max Revenue beat(2)0.7%
Revenue beat(4)1
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-3.82%
Max Revenue beat(4)0.7%
Revenue beat(8)4
Avg Revenue beat(8)-0.76%
Revenue beat(12)8
Avg Revenue beat(12)1.84%
Revenue beat(16)11
Avg Revenue beat(16)2.69%
PT rev (1m)-2.39%
PT rev (3m)-14.35%
EPS NQ rev (1m)2.17%
EPS NQ rev (3m)-24.93%
EPS NY rev (1m)29.55%
EPS NY rev (3m)-26.91%
Revenue NQ rev (1m)-0.94%
Revenue NQ rev (3m)-3.44%
Revenue NY rev (1m)-1.01%
Revenue NY rev (3m)-2.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.4 | ||
| Fwd PE | 44.43 | ||
| P/S | 1.91 | ||
| P/FCF | N/A | ||
| P/OCF | 10.72 | ||
| P/B | 0.85 | ||
| P/tB | 0.85 | ||
| EV/EBITDA | 12.29 |
EPS(TTM)0.1
EY1.13%
EPS(NY)0.2
Fwd EY2.25%
FCF(TTM)-0.33
FCFYN/A
OCF(TTM)0.82
OCFY9.32%
SpS4.64
BVpS10.45
TBVpS10.45
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.64% | ||
| ROE | 0.95% | ||
| ROCE | 2.65% | ||
| ROIC | 2.09% | ||
| ROICexc | 2.14% | ||
| ROICexgc | 2.14% | ||
| OM | 8.43% | ||
| PM (TTM) | 2.14% | ||
| GM | 60.93% | ||
| 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 Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.09 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 1.67 | ||
| Cash Conversion | 79.75% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 | ||
| Altman-Z | 1.16 |
F-Score4
WACC8.73%
ROIC/WACC0.24
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)-66.67%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-80%
EPS Next Y-1.4%
EPS Next 2Y19.21%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.9%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%7.78%
Revenue Next Year7.13%
Revenue Next 2Y5.28%
Revenue Next 3Y4.03%
Revenue Next 5YN/A
EBIT growth 1Y-30%
EBIT growth 3YN/A
EBIT growth 5Y-13.48%
EBIT Next Year209.81%
EBIT Next 3Y51.43%
EBIT Next 5YN/A
FCF growth 1Y-668.76%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-32.68%
OCF growth 3Y81.77%
OCF growth 5Y-10.15%