SUNSTONE HOTEL INVESTORS INC (SHO)

US8678921011 - REIT

10.53  +0.01 (+0.1%)

After market: 10.53 0 (0%)

Fundamental Rating

5

Taking everything into account, SHO scores 5 out of 10 in our fundamental rating. SHO was compared to 126 industry peers in the Diversified REITs industry. SHO is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. SHO has a valuation in line with the averages, but it does not seem to be growing.



5

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

Looking at the Return On Assets, with a value of 6.09%, SHO belongs to the top of the industry, outperforming 94.31% of the companies in the same industry.
SHO has a Return On Equity of 8.85%. This is amongst the best in the industry. SHO outperforms 84.55% of its industry peers.
The Return On Invested Capital of SHO (3.11%) is better than 61.79% of its industry peers.
Industry RankSector Rank
ROA 6.09%
ROE 8.85%
ROIC 3.11%
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

With a decent Profit Margin value of 19.44%, SHO is doing good in the industry, outperforming 72.36% of the companies in the same industry.
SHO's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 12.03%, SHO is doing worse than 72.36% of the companies in the same industry.
SHO's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 61.94%, SHO is doing worse than 69.11% of the companies in the same industry.
In the last couple of years the Gross Margin of SHO has remained more or less at the same level.
Industry RankSector Rank
OM 12.03%
PM (TTM) 19.44%
GM 61.94%
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%

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.
SHO has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, SHO has less shares outstanding
SHO has a better debt/assets ratio than last year.

2.2 Solvency

SHO has an Altman-Z score of 1.66. 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 (1.66) than 90.24% of its industry peers.
The Debt to FCF ratio of SHO is 4.11, which is a neutral value as it means it would take SHO, 4.11 years of fcf income to pay off all of its debts.
SHO has a Debt to FCF ratio of 4.11. This is amongst the best in the industry. SHO outperforms 99.19% of its industry peers.
SHO has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
SHO's Debt to Equity ratio of 0.38 is amongst the best of the industry. SHO outperforms 95.12% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.38
Debt/FCF 4.11
Altman-Z 1.66
ROIC/WACC0.39
WACC8.02%

2.3 Liquidity

SHO has a Current Ratio of 3.79. This indicates that SHO is financially healthy and has no problem in meeting its short term obligations.
SHO's Current ratio of 3.79 is amongst the best of the industry. SHO outperforms 91.87% of its industry peers.
A Quick Ratio of 3.79 indicates that SHO has no problem at all paying its short term obligations.
SHO's Quick ratio of 3.79 is amongst the best of the industry. SHO outperforms 91.87% of its industry peers.
Industry RankSector Rank
Current Ratio 3.79
Quick Ratio 3.79

2

3. Growth

3.1 Past

The earnings per share for SHO have decreased by -5.71% in the last year.
The earnings per share for SHO have been decreasing by -20.66% on average. This is quite bad
The Revenue has grown by 8.16% in the past year. This is quite good.
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)-5.71%
EPS 3YN/A
EPS 5Y-20.66%
EPS growth Q2Q-100%
Revenue 1Y (TTM)8.16%
Revenue growth 3Y54.42%
Revenue growth 5Y-3.17%
Revenue growth Q2Q-10.19%

3.2 Future

SHO is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -5.01% yearly.
The Revenue is expected to decrease by -0.83% on average over the next years.
EPS Next Y-22.95%
EPS Next 2Y2.61%
EPS Next 3Y-5.01%
EPS Next 5YN/A
Revenue Next Year-6.27%
Revenue Next 2Y-1.12%
Revenue Next 3Y-0.83%
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

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 31.91, which means the current valuation is very expensive for SHO.
Compared to the rest of the industry, the Price/Earnings ratio of SHO indicates a somewhat cheap valuation: SHO is cheaper than 60.98% of the companies listed in the same industry.
SHO is valuated rather expensively when we compare the Price/Earnings ratio to 25.25, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 41.41, the valuation of SHO can be described as expensive.
Based on the Price/Forward Earnings ratio, SHO is valued a bit cheaper than 64.23% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SHO to the average of the S&P500 Index (21.67), we can say SHO is valued expensively.
Industry RankSector Rank
PE 31.91
Fwd PE 41.41

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SHO is valued cheaper than 83.74% of the companies in the same industry.
SHO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SHO is cheaper than 86.99% of the companies in the same industry.
Industry RankSector Rank
P/FCF 10.83
EV/EBITDA 10.31

4.3 Compensation for Growth

A cheap valuation may be justified as SHO's earnings are expected to decrease with -5.01% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.61%
EPS Next 3Y-5.01%

3

5. Dividend

5.1 Amount

SHO has a Yearly Dividend Yield of 2.58%. Purely for dividend investing, there may be better candidates out there.
With a Dividend Yield of 2.58, SHO pays less dividend than the industry average, which is at 6.13. 81.30% of the companies listed in the same industry pay a better dividend than SHO!
SHO's Dividend Yield is comparable with the S&P500 average which is at 2.45.
Industry RankSector Rank
Dividend Yield 2.58%

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 31.20% of its income as dividend. This is a sustainable payout ratio.
SHO's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP31.2%
EPS Next 2Y2.61%
EPS Next 3Y-5.01%

SUNSTONE HOTEL INVESTORS INC

NYSE:SHO (4/24/2024, 7:04:00 PM)

After market: 10.53 0 (0%)

10.53

+0.01 (+0.1%)

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 Cap2.14B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.58%
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)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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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 RankSector Rank
PE 31.91
Fwd PE 41.41
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 RankSector Rank
ROA 6.09%
ROE 8.85%
ROCE
ROIC
ROICexc
ROICexgc
OM 12.03%
PM (TTM) 19.44%
GM 61.94%
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 RankSector Rank
Debt/Equity 0.38
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 3.79
Quick Ratio 3.79
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)
Growth
EPS 1Y (TTM)-5.71%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y-22.95%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.16%
Revenue growth 3Y54.42%
Revenue growth 5Y
Revenue growth 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