SUNSTONE HOTEL INVESTORS INC (SHO) Stock Fundamental Analysis
NYSE:SHO - New York Stock Exchange, Inc. - US8678921011 - REIT - Currency: USD
Overall SHO gets a fundamental rating of 4 out of 10. We evaluated SHO against 129 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 has a expensive valuation and it also scores bad on growth.
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.
Of the past 5 years SHO 4 years had a positive operating cash flow.
1.2 Ratios
SHO has a Return On Assets of 0.64%. This is comparable to the rest of the industry: SHO outperforms 50.39% of its industry peers.
SHO has a Return On Equity of 0.95%. This is comparable to the rest of the industry: SHO outperforms 45.74% of its industry peers.
With a Return On Invested Capital value of 2.09%, SHO is not doing good in the industry: 65.12% 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 3.15%.
| 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
SHO has a Profit Margin (2.14%) which is in line with its industry peers.
SHO's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 8.43%, SHO is not doing good in the industry: 81.40% of the companies in the same industry are doing better.
SHO's Operating Margin has declined in the last couple of years.
SHO has a Gross Margin of 60.93%. This is in the lower half of the industry: SHO underperforms 66.67% 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SHO is destroying value.
The number of shares outstanding for SHO has been reduced compared to 1 year ago.
The number of shares outstanding for SHO has been reduced compared to 5 years ago.
SHO has a worse debt/assets ratio than last year.
2.2 Solvency
SHO has an Altman-Z score of 1.14. This is a bad value and indicates that SHO is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of SHO (1.14) is better than 82.17% of its industry peers.
A Debt/Equity ratio of 0.41 indicates that SHO is not too dependend on debt financing.
SHO has a Debt to Equity ratio of 0.41. This is amongst the best in the industry. SHO outperforms 93.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.14 |
ROIC/WACC0.27
WACC7.69%
2.3 Liquidity
A Current Ratio of 1.27 indicates that SHO should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.27, SHO is doing good in the industry, outperforming 63.57% of the companies in the same industry.
A Quick Ratio of 1.27 indicates that SHO should not have too much problems paying its short term obligations.
SHO has a Quick ratio of 1.27. This is in the better half of the industry: SHO outperforms 64.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
SHO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -66.67%.
The earnings per share for SHO have been decreasing by -23.38% on average. This is quite bad
SHO shows a decrease in Revenue. In the last year, the revenue decreased by -3.90%.
Measured over the past years, SHO shows a decrease in Revenue. The Revenue has been decreasing by -4.07% on average per year.
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
SHO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.89% yearly.
The Revenue is expected to grow by 4.03% on average over the next years.
EPS Next Y-23.89%
EPS Next 2Y20.27%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue Next Year8.23%
Revenue Next 2Y5.64%
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
With a Price/Earnings ratio of 89.90, SHO can be considered very expensive at the moment.
SHO's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 25.91. SHO is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 44.39, SHO can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHO indicates a somewhat cheap valuation: SHO is cheaper than 61.24% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.77. SHO is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.9 | ||
| Fwd PE | 44.39 |
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 65.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.13 |
4.3 Compensation for Growth
SHO's earnings are expected to grow with 24.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y20.27%
EPS Next 3Y24.89%
5. Dividend
5.1 Amount
SHO has a Yearly Dividend Yield of 4.19%, which is a nice return.
Compared to an average industry Dividend Yield of 6.93, SHO is paying slightly less dividend.
SHO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.19% |
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 2Y20.27%
EPS Next 3Y24.89%
8.99
+0.32 (+3.69%)
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 Change0.69%
Ins Owners1.18%
Ins Owner Change6.39%
Market Cap1.79B
Analysts73.33
Price Target10.29 (14.46%)
Short Float %7.74%
Short Ratio5.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.19% |
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)-10.48%
PT rev (3m)-13.62%
EPS NQ rev (1m)-35.3%
EPS NQ rev (3m)-23.18%
EPS NY rev (1m)-59.14%
EPS NY rev (3m)-52.05%
Revenue NQ rev (1m)-2.19%
Revenue NQ rev (3m)-1.97%
Revenue NY rev (1m)-1.09%
Revenue NY rev (3m)-1.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.9 | ||
| Fwd PE | 44.39 | ||
| P/S | 1.94 | ||
| P/FCF | N/A | ||
| P/OCF | 10.91 | ||
| P/B | 0.86 | ||
| P/tB | 0.86 | ||
| EV/EBITDA | 12.13 |
EPS(TTM)0.1
EY1.11%
EPS(NY)0.2
Fwd EY2.25%
FCF(TTM)-0.33
FCFYN/A
OCF(TTM)0.82
OCFY9.17%
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 | 1.14 |
F-Score4
WACC7.69%
ROIC/WACC0.27
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-23.89%
EPS Next 2Y20.27%
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 Year8.23%
Revenue Next 2Y5.64%
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%