WYNDHAM HOTELS & RESORTS INC (WH) Stock Fundamental Analysis
NYSE:WH - New York Stock Exchange, Inc. - US98311A1051 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to WH. WH was compared to 134 industry peers in the Hotels, Restaurants & Leisure industry. WH scores excellent on profitability, but there are concerns on its financial health. WH has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
WH had positive earnings in the past year.
WH had a positive operating cash flow in the past year.
Of the past 5 years WH 4 years were profitable.
Each year in the past 5 years WH had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 7.86%, WH is doing good in the industry, outperforming 78.36% of the companies in the same industry.
The Return On Equity of WH (57.69%) is better than 95.52% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.31%, WH is in the better half of the industry, outperforming 76.12% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WH is below the industry average of 13.97%.
The 3 year average ROIC (10.92%) for WH is below the current ROIC(11.31%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.86% | ||
| ROE | 57.69% | ||
| ROIC | 11.31% |
ROA(3y)7.54%
ROA(5y)5.1%
ROE(3y)40.03%
ROE(5y)25.76%
ROIC(3y)10.92%
ROIC(5y)9.06%
1.3 Margins
WH's Profit Margin of 23.52% is amongst the best of the industry. WH outperforms 97.01% of its industry peers.
WH's Profit Margin has improved in the last couple of years.
WH has a better Operating Margin (40.00%) than 99.25% of its industry peers.
In the last couple of years the Operating Margin of WH has grown nicely.
WH has a Gross Margin of 59.58%. This is in the better half of the industry: WH outperforms 72.39% of its industry peers.
WH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 40% | ||
| PM (TTM) | 23.52% | ||
| GM | 59.58% |
OM growth 3Y10.88%
OM growth 5Y11.89%
PM growth 3Y9.6%
PM growth 5Y21.83%
GM growth 3Y6.26%
GM growth 5Y7.12%
2. Health
2.1 Basic Checks
WH has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for WH has been reduced compared to 1 year ago.
WH has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, WH has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.00 indicates that WH is not a great score, but indicates only limited risk for bankruptcy at the moment.
WH has a Altman-Z score (2.00) which is in line with its industry peers.
WH has a debt to FCF ratio of 11.19. This is a negative value and a sign of low solvency as WH would need 11.19 years to pay back of all of its debts.
WH's Debt to FCF ratio of 11.19 is in line compared to the rest of the industry. WH outperforms 58.96% of its industry peers.
A Debt/Equity ratio of 4.29 is on the high side and indicates that WH has dependencies on debt financing.
The Debt to Equity ratio of WH (4.29) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.19 | ||
| Altman-Z | 2 |
ROIC/WACC1.48
WACC7.66%
2.3 Liquidity
A Current Ratio of 0.96 indicates that WH may have some problems paying its short term obligations.
With a Current ratio value of 0.96, WH perfoms like the industry average, outperforming 52.99% of the companies in the same industry.
WH has a Quick Ratio of 0.96. This is a bad value and indicates that WH is not financially healthy enough and could expect problems in meeting its short term obligations.
WH has a Quick ratio (0.96) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
WH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.47%, which is quite good.
The Earnings Per Share has been growing slightly by 5.83% on average over the past years.
Looking at the last year, WH shows a small growth in Revenue. The Revenue has grown by 2.16% in the last year.
The Revenue has been decreasing by -7.27% on average over the past years.
EPS 1Y (TTM)12.47%
EPS 3Y11.16%
EPS 5Y5.83%
EPS Q2Q%10.26%
Revenue 1Y (TTM)2.16%
Revenue growth 3Y-3.46%
Revenue growth 5Y-7.27%
Sales Q2Q%3.95%
3.2 Future
WH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.22% yearly.
WH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.37% yearly.
EPS Next Y11.64%
EPS Next 2Y12.48%
EPS Next 3Y13.26%
EPS Next 5Y14.22%
Revenue Next Year3.77%
Revenue Next 2Y5.15%
Revenue Next 3Y5.99%
Revenue Next 5Y7.37%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
WH is valuated rather expensively with a Price/Earnings ratio of 17.95.
Compared to the rest of the industry, the Price/Earnings ratio of WH indicates a somewhat cheap valuation: WH is cheaper than 73.13% of the companies listed in the same industry.
WH is valuated rather cheaply when we compare the Price/Earnings ratio to 26.35, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 14.45 indicates a correct valuation of WH.
WH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. WH is cheaper than 70.90% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.19, WH is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.95 | ||
| Fwd PE | 14.45 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WH.
64.18% of the companies in the same industry are more expensive than WH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.03 | ||
| EV/EBITDA | 13.59 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
WH has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as WH's earnings are expected to grow with 13.26% in the coming years.
PEG (NY)1.54
PEG (5Y)3.08
EPS Next 2Y12.48%
EPS Next 3Y13.26%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.00%, WH has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.59, WH pays a bit more dividend than its industry peers.
WH's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
5.2 History
The dividend of WH has a limited annual growth rate of 5.55%.
WH has been paying a dividend for over 5 years, so it has already some track record.
WH has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.55%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
WH pays out 36.83% of its income as dividend. This is a sustainable payout ratio.
The dividend of WH is growing, but earnings are growing more, so the dividend growth is sustainable.
DP36.83%
EPS Next 2Y12.48%
EPS Next 3Y13.26%
79.33
-0.35 (-0.44%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners96.26%
Inst Owner Change-4.48%
Ins Owners2.23%
Ins Owner Change21.56%
Market Cap6.11B
Analysts86.67
Price Target105.85 (33.43%)
Short Float %3.08%
Short Ratio2.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
Yearly Dividend1.53
Dividend Growth(5Y)5.55%
DP36.83%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.2%
Min EPS beat(2)1.91%
Max EPS beat(2)2.49%
EPS beat(4)3
Avg EPS beat(4)2.11%
Min EPS beat(4)-2.03%
Max EPS beat(4)6.05%
EPS beat(8)5
Avg EPS beat(8)1.11%
EPS beat(12)9
Avg EPS beat(12)4.11%
EPS beat(16)13
Avg EPS beat(16)11.26%
Revenue beat(2)0
Avg Revenue beat(2)-3.7%
Min Revenue beat(2)-3.89%
Max Revenue beat(2)-3.51%
Revenue beat(4)0
Avg Revenue beat(4)-4.69%
Min Revenue beat(4)-7.52%
Max Revenue beat(4)-3.51%
Revenue beat(8)0
Avg Revenue beat(8)-3.95%
Revenue beat(12)3
Avg Revenue beat(12)-2.47%
Revenue beat(16)4
Avg Revenue beat(16)-2.07%
PT rev (1m)-1.72%
PT rev (3m)-11.5%
EPS NQ rev (1m)0.36%
EPS NQ rev (3m)-4.92%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.25%
Revenue NQ rev (1m)-0.15%
Revenue NQ rev (3m)-3.45%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-2.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.95 | ||
| Fwd PE | 14.45 | ||
| P/S | 4.3 | ||
| P/FCF | 27.03 | ||
| P/OCF | 22.38 | ||
| P/B | 10.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.59 |
EPS(TTM)4.42
EY5.57%
EPS(NY)5.49
Fwd EY6.92%
FCF(TTM)2.94
FCFY3.7%
OCF(TTM)3.55
OCFY4.47%
SpS18.44
BVpS7.52
TBVpS-32.34
PEG (NY)1.54
PEG (5Y)3.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.86% | ||
| ROE | 57.69% | ||
| ROCE | 14.96% | ||
| ROIC | 11.31% | ||
| ROICexc | 11.45% | ||
| ROICexgc | 63.22% | ||
| OM | 40% | ||
| PM (TTM) | 23.52% | ||
| GM | 59.58% | ||
| FCFM | 15.92% |
ROA(3y)7.54%
ROA(5y)5.1%
ROE(3y)40.03%
ROE(5y)25.76%
ROIC(3y)10.92%
ROIC(5y)9.06%
ROICexc(3y)11.26%
ROICexc(5y)9.44%
ROICexgc(3y)87.36%
ROICexgc(5y)71.71%
ROCE(3y)14.45%
ROCE(5y)11.99%
ROICexcg growth 3Y1.88%
ROICexcg growth 5Y0.36%
ROICexc growth 3Y7.5%
ROICexc growth 5Y5.53%
OM growth 3Y10.88%
OM growth 5Y11.89%
PM growth 3Y9.6%
PM growth 5Y21.83%
GM growth 3Y6.26%
GM growth 5Y7.12%
F-Score6
Asset Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.19 | ||
| Debt/EBITDA | 3.92 | ||
| Cap/Depr | 71.21% | ||
| Cap/Sales | 3.31% | ||
| Interest Coverage | 4.34 | ||
| Cash Conversion | 43.06% | ||
| Profit Quality | 67.66% | ||
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 2 |
F-Score6
WACC7.66%
ROIC/WACC1.48
Cap/Depr(3y)56.12%
Cap/Depr(5y)48.19%
Cap/Sales(3y)2.91%
Cap/Sales(5y)2.73%
Profit Quality(3y)100.7%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.47%
EPS 3Y11.16%
EPS 5Y5.83%
EPS Q2Q%10.26%
EPS Next Y11.64%
EPS Next 2Y12.48%
EPS Next 3Y13.26%
EPS Next 5Y14.22%
Revenue 1Y (TTM)2.16%
Revenue growth 3Y-3.46%
Revenue growth 5Y-7.27%
Sales Q2Q%3.95%
Revenue Next Year3.77%
Revenue Next 2Y5.15%
Revenue Next 3Y5.99%
Revenue Next 5Y7.37%
EBIT growth 1Y12.25%
EBIT growth 3Y7.04%
EBIT growth 5Y3.76%
EBIT Next Year36.44%
EBIT Next 3Y16.57%
EBIT Next 5Y13.48%
FCF growth 1Y-29.15%
FCF growth 3Y-14.75%
FCF growth 5Y36.96%
OCF growth 1Y-23.53%
OCF growth 3Y-12.03%
OCF growth 5Y23.73%