SUNSTONE HOTEL INVESTORS INC (SHO)
US8678921011 - REIT
We assign a fundamental rating of 5 out of 10 to SHO. SHO was compared to 127 industry peers in the Diversified REITs industry. SHO has an excellent financial health rating, but there are some minor 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.
SHO had a positive operating cash flow in the past year.
Of the past 5 years SHO 4 years were profitable.
SHO had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
SHO has a better Return On Assets (5.85%) than 96.00% of its industry peers.
SHO's Return On Equity of 8.50% is amongst the best of the industry. SHO outperforms 86.40% of its industry peers.
With a Return On Invested Capital value of 2.93%, SHO perfoms like the industry average, outperforming 56.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.85% | ||
| ROE | 8.5% | ||
| ROIC | 2.93% |
ROA(3y)2.96%
ROA(5y)-0.4%
ROE(3y)4.32%
ROE(5y)-0.54%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 19.14%, SHO is in the better half of the industry, outperforming 72.80% of the companies in the same industry.
SHO's Profit Margin has been stable in the last couple of years.
SHO has a Operating Margin of 11.58%. This is in the lower half of the industry: SHO underperforms 72.80% of its industry peers.
In the last couple of years the Operating Margin of SHO has declined.
SHO's Gross Margin of 61.68% is on the low side compared to the rest of the industry. SHO is outperformed by 68.80% of its industry peers.
SHO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.58% | ||
| PM (TTM) | 19.14% | ||
| GM | 61.68% |
OM growth 3YN/A
OM growth 5Y-5.33%
PM growth 3YN/A
PM growth 5Y-0.96%
GM growth 3Y11.34%
GM growth 5Y-0.56%
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 has been reduced compared to a year ago.
2.2 Solvency
SHO has an Altman-Z score of 1.59. This is a bad value and indicates that SHO is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.59, SHO belongs to the best of the industry, outperforming 89.60% of the companies in the same industry.
SHO has a debt to FCF ratio of 4.30. This is a neutral value as SHO would need 4.30 years to pay back of all of its debts.
SHO has a better Debt to FCF ratio (4.30) than 98.40% of its industry peers.
A Debt/Equity ratio of 0.38 indicates that SHO is not too dependend on debt financing.
The Debt to Equity ratio of SHO (0.38) is better than 95.20% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 4.3 | ||
| Altman-Z | 1.59 |
ROIC/WACC0.38
WACC7.77%
2.3 Liquidity
SHO has a Current Ratio of 3.56. This indicates that SHO is financially healthy and has no problem in meeting its short term obligations.
SHO's Current ratio of 3.56 is amongst the best of the industry. SHO outperforms 86.40% of its industry peers.
A Quick Ratio of 3.56 indicates that SHO has no problem at all paying its short term obligations.
SHO has a Quick ratio of 3.56. This is amongst the best in the industry. SHO outperforms 86.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.56 | ||
| Quick Ratio | 3.56 |
3. Growth
3.1 Past
The earnings per share for SHO have decreased strongly by -21.05% in the last year.
The earnings per share for SHO have been decreasing by -20.66% on average. This is quite bad
SHO shows a decrease in Revenue. In the last year, the revenue decreased by -2.33%.
Measured over the past years, SHO shows a decrease in Revenue. The Revenue has been decreasing by -3.17% on average per year.
EPS 1Y (TTM)-21.05%
EPS 3YN/A
EPS 5Y-20.66%
EPS Q2Q%-37.5%
Revenue 1Y (TTM)-2.33%
Revenue growth 3Y54.42%
Revenue growth 5Y-3.17%
Sales Q2Q%-10.79%
3.2 Future
The Earnings Per Share is expected to grow by 4.23% on average over the next years.
Based on estimates for the next years, SHO will show a small growth in Revenue. The Revenue will grow by 2.45% on average per year.
EPS Next Y-11.24%
EPS Next 2Y2.46%
EPS Next 3Y4.23%
EPS Next 5YN/A
Revenue Next Year-1.71%
Revenue Next 2Y2.17%
Revenue Next 3Y2.45%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
SHO is valuated quite expensively with a Price/Earnings ratio of 34.67.
SHO's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 24.41, SHO is valued a bit more expensive.
A Price/Forward Earnings ratio of 30.02 indicates a quite expensive valuation of SHO.
Based on the Price/Forward Earnings ratio, SHO is valued a bit cheaper than 78.40% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SHO to the average of the S&P500 Index (20.59), we can say SHO is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.67 | ||
| Fwd PE | 30.02 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SHO indicates a rather cheap valuation: SHO is cheaper than 81.60% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SHO indicates a rather cheap valuation: SHO is cheaper than 90.40% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.18 | ||
| EV/EBITDA | 10.6 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.46%
EPS Next 3Y4.23%
5. Dividend
5.1 Amount
SHO has a Yearly Dividend Yield of 2.88%.
Compared to an average industry Dividend Yield of 5.52, SHO is paying slightly less dividend.
SHO's Dividend Yield is a higher than the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.88% |
5.2 History
The dividend of SHO decreases each year by -18.03%.
SHO has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of SHO decreased recently.
Dividend Growth(5Y)-18.03%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
SHO pays out 41.13% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP41.13%
EPS Next 2Y2.46%
EPS Next 3Y4.23%
SUNSTONE HOTEL INVESTORS INC
NYSE:SHO (7/26/2024, 7:04:00 PM)
After market: 10.4 0 (0%)10.4
+0.21 (+2.06%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.12B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.88% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.67 | ||
| Fwd PE | 30.02 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.85% | ||
| ROE | 8.5% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.58% | ||
| PM (TTM) | 19.14% | ||
| GM | 61.68% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.56 | ||
| Quick Ratio | 3.56 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-21.05%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y-11.24%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.33%
Revenue growth 3Y54.42%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y