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. SHO scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. SHO does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
SHO had positive earnings in the past year.
In the past year SHO had a positive cash flow from operations.
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
The Return On Assets of SHO (0.89%) is comparable to the rest of the industry.
SHO has a Return On Equity of 1.32%. This is comparable to the rest of the industry: SHO outperforms 50.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.09%, SHO is doing worse than 65.38% of the companies in the same industry.
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 comparable to the rest of the industry.
SHO's Profit Margin has declined in the last couple of years.
The Operating Margin of SHO (8.68%) is worse than 79.23% of its industry peers.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
Compared to 1 year ago, SHO has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.14, we must say that SHO is in the distress zone and has some risk of bankruptcy.
SHO has a better Altman-Z score (1.14) than 83.08% of its industry peers.
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 | 1.14 |
ROIC/WACC0.28
WACC7.51%
2.3 Liquidity
A Current Ratio of 1.51 indicates that SHO should not have too much problems paying its short term obligations.
SHO has a better Current ratio (1.51) than 65.38% of its industry peers.
SHO has a Quick 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.
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.
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.
Looking at the last year, SHO shows a decrease in Revenue. The Revenue has decreased by -8.17% in the last year.
The Revenue has been decreasing by -4.07% on average over the past years.
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
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
The Price/Earnings ratio is 58.86, which means the current valuation is very expensive for SHO.
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 28.79, SHO is valued quite expensively.
Based on the Price/Forward Earnings ratio of 31.60, the valuation of SHO can be described as expensive.
SHO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SHO is cheaper than 74.62% of the companies in the same industry.
SHO's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.86 | ||
| Fwd PE | 31.6 |
4.2 Price Multiples
SHO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SHO is cheaper than 66.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.78 |
4.3 Compensation for Growth
SHO's 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)0.68
PEG (5Y)N/A
EPS Next 2Y53.17%
EPS Next 3Y24.89%
5. Dividend
5.1 Amount
SHO has a Yearly Dividend Yield of 4.47%, which is a nice return.
In the last 3 months the price of SHO has falen by -28.16%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
SHO's Dividend Yield is slightly below the industry average, which is at 16.90.
SHO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.47.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
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.
SHO has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-9.74%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
327.68% of the earnings are spent on dividend by SHO. This is not a sustainable payout ratio.
DP327.68%
EPS Next 2Y53.17%
EPS Next 3Y24.89%
8.24
+0.18 (+2.23%)
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 Change-26.75%
Ins Owners1.18%
Ins Owner Change4.77%
Market Cap1.66B
Analysts68.75
Price Target10.43 (26.58%)
Short Float %7.11%
Short Ratio5.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
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)-11.76%
PT rev (3m)-11.07%
EPS NQ rev (1m)350%
EPS NQ rev (3m)26.58%
EPS NY rev (1m)38.07%
EPS NY rev (3m)8.49%
Revenue NQ rev (1m)-0.55%
Revenue NQ rev (3m)-1.33%
Revenue NY rev (1m)-0.59%
Revenue NY rev (3m)-0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.86 | ||
| Fwd PE | 31.6 | ||
| P/S | 1.83 | ||
| P/FCF | N/A | ||
| P/OCF | 9.73 | ||
| P/B | 0.79 | ||
| P/tB | 0.79 | ||
| EV/EBITDA | 11.78 |
EPS(TTM)0.14
EY1.7%
EPS(NY)0.26
Fwd EY3.16%
FCF(TTM)-0.29
FCFYN/A
OCF(TTM)0.85
OCFY10.28%
SpS4.5
BVpS10.46
TBVpS10.46
PEG (NY)0.68
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 | 1.14 |
F-Score4
WACC7.51%
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%