WYNDHAM HOTELS & RESORTS INC (WH) Stock Fundamental Analysis
NYSE:WH - New York Stock Exchange, Inc. - US98311A1051 - Common Stock - Currency: USD
Taking everything into account, WH scores 5 out of 10 in our fundamental rating. WH was compared to 136 industry peers in the Hotels, Restaurants & Leisure industry. While WH belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. WH is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WH was profitable.
In the past year WH had a positive cash flow from operations.
WH had positive earnings in 4 of the past 5 years.
WH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 6.84%, WH is doing good in the industry, outperforming 75.74% of the companies in the same industry.
The Return On Equity of WH (44.46%) is better than 91.18% of its industry peers.
The Return On Invested Capital of WH (11.26%) is better than 77.21% of its industry peers.
WH had an Average Return On Invested Capital over the past 3 years of 10.92%. This is below the industry average of 14.07%.
The last Return On Invested Capital (11.26%) for WH is above the 3 year average (10.92%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.84% | ||
| ROE | 44.46% | ||
| ROIC | 11.26% |
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 20.51% is amongst the best of the industry. WH outperforms 94.85% of its industry peers.
In the last couple of years the Profit Margin of WH has grown nicely.
WH has a better Operating Margin (39.74%) than 99.26% of its industry peers.
WH's Operating Margin has improved in the last couple of years.
WH has a Gross Margin of 59.69%. This is in the better half of the industry: WH outperforms 72.79% of its industry peers.
WH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 39.74% | ||
| PM (TTM) | 20.51% | ||
| GM | 59.69% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WH is creating some value.
WH has less shares outstanding than it did 1 year ago.
The number of shares outstanding for WH has been reduced compared to 5 years ago.
Compared to 1 year ago, WH has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.10 indicates that WH is not a great score, but indicates only limited risk for bankruptcy at the moment.
WH's Altman-Z score of 2.10 is fine compared to the rest of the industry. WH outperforms 62.50% of its industry peers.
WH has a debt to FCF ratio of 10.22. This is a negative value and a sign of low solvency as WH would need 10.22 years to pay back of all of its debts.
WH has a Debt to FCF ratio (10.22) which is in line with its industry peers.
A Debt/Equity ratio of 3.72 is on the high side and indicates that WH has dependencies on debt financing.
WH has a Debt to Equity ratio of 3.72. This is comparable to the rest of the industry: WH outperforms 44.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.72 | ||
| Debt/FCF | 10.22 | ||
| Altman-Z | 2.1 |
ROIC/WACC1.36
WACC8.31%
2.3 Liquidity
WH has a Current Ratio of 1.00. This is a normal value and indicates that WH is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.00, WH perfoms like the industry average, outperforming 58.09% of the companies in the same industry.
A Quick Ratio of 1.00 indicates that WH should not have too much problems paying its short term obligations.
The Quick ratio of WH (1.00) is better than 61.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.47% over the past year.
The Earnings Per Share has been growing slightly by 5.83% on average over the past years.
The Revenue has been growing slightly by 0.79% in the past year.
WH shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -7.27% yearly.
EPS 1Y (TTM)12.47%
EPS 3Y11.16%
EPS 5Y5.83%
EPS Q2Q%10.26%
Revenue 1Y (TTM)0.79%
Revenue growth 3Y-3.46%
Revenue growth 5Y-7.27%
Sales Q2Q%3.95%
3.2 Future
Based on estimates for the next years, WH will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.90% on average per year.
The Revenue is expected to grow by 7.77% on average over the next years.
EPS Next Y13.69%
EPS Next 2Y14.33%
EPS Next 3Y14.83%
EPS Next 5Y14.9%
Revenue Next Year5.63%
Revenue Next 2Y6.32%
Revenue Next 3Y6.66%
Revenue Next 5Y7.77%
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
A Price/Earnings ratio of 19.31 indicates a rather expensive valuation of WH.
Compared to the rest of the industry, the Price/Earnings ratio of WH indicates a somewhat cheap valuation: WH is cheaper than 68.38% of the companies listed in the same industry.
WH's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.85.
With a Price/Forward Earnings ratio of 15.05, WH is valued correctly.
Based on the Price/Forward Earnings ratio, WH is valued a bit cheaper than 73.53% of the companies in the same industry.
WH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.77, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.31 | ||
| Fwd PE | 15.05 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WH.
Based on the Price/Free Cash Flow ratio, WH is valued a bit cheaper than 63.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.44 | ||
| EV/EBITDA | 14.21 |
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.
WH's earnings are expected to grow with 14.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.41
PEG (5Y)3.32
EPS Next 2Y14.33%
EPS Next 3Y14.83%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.90%, WH has a reasonable but not impressive dividend return.
WH's Dividend Yield is a higher than the industry average which is at 3.85.
WH's Dividend Yield is slightly below the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
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 Years3
Div Non Decr Years3
5.3 Sustainability
42.21% of the earnings are spent on dividend by WH. This is a bit on the high side, but may be sustainable.
The dividend of WH is growing, but earnings are growing more, so the dividend growth is sustainable.
DP42.21%
EPS Next 2Y14.33%
EPS Next 3Y14.83%
85.36
+0.06 (+0.07%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners98.77%
Inst Owner Change0.16%
Ins Owners2.13%
Ins Owner Change22.29%
Market Cap6.61B
Analysts85.22
Price Target112.96 (32.33%)
Short Float %2.55%
Short Ratio1.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
Yearly Dividend1.53
Dividend Growth(5Y)5.55%
DP42.21%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.06%
Min EPS beat(2)-2.03%
Max EPS beat(2)1.91%
EPS beat(4)3
Avg EPS beat(4)1.88%
Min EPS beat(4)-2.03%
Max EPS beat(4)6.05%
EPS beat(8)5
Avg EPS beat(8)1.28%
EPS beat(12)9
Avg EPS beat(12)7.49%
EPS beat(16)13
Avg EPS beat(16)13.52%
Revenue beat(2)0
Avg Revenue beat(2)-5.71%
Min Revenue beat(2)-7.52%
Max Revenue beat(2)-3.89%
Revenue beat(4)0
Avg Revenue beat(4)-4.88%
Min Revenue beat(4)-7.52%
Max Revenue beat(4)-3.85%
Revenue beat(8)0
Avg Revenue beat(8)-4.37%
Revenue beat(12)4
Avg Revenue beat(12)-1.75%
Revenue beat(16)4
Avg Revenue beat(16)-2.58%
PT rev (1m)-5.56%
PT rev (3m)4.54%
EPS NQ rev (1m)-1.61%
EPS NQ rev (3m)-8.61%
EPS NY rev (1m)-0.87%
EPS NY rev (3m)0.95%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)-0.39%
Revenue NY rev (3m)-0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.31 | ||
| Fwd PE | 15.05 | ||
| P/S | 4.69 | ||
| P/FCF | 27.44 | ||
| P/OCF | 22.81 | ||
| P/B | 10.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.21 |
EPS(TTM)4.42
EY5.18%
EPS(NY)5.67
Fwd EY6.65%
FCF(TTM)3.11
FCFY3.64%
OCF(TTM)3.74
OCFY4.38%
SpS18.19
BVpS8.39
TBVpS-31.27
PEG (NY)1.41
PEG (5Y)3.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.84% | ||
| ROE | 44.46% | ||
| ROCE | 14.91% | ||
| ROIC | 11.26% | ||
| ROICexc | 11.58% | ||
| ROICexgc | 72.84% | ||
| OM | 39.74% | ||
| PM (TTM) | 20.51% | ||
| GM | 59.69% | ||
| FCFM | 17.1% |
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 | 3.72 | ||
| Debt/FCF | 10.22 | ||
| Debt/EBITDA | 3.84 | ||
| Cap/Depr | 69.01% | ||
| Cap/Sales | 3.48% | ||
| Interest Coverage | 4.44 | ||
| Cash Conversion | 45.96% | ||
| Profit Quality | 83.39% | ||
| Current Ratio | 1 | ||
| Quick Ratio | 1 | ||
| Altman-Z | 2.1 |
F-Score6
WACC8.31%
ROIC/WACC1.36
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 Y13.69%
EPS Next 2Y14.33%
EPS Next 3Y14.83%
EPS Next 5Y14.9%
Revenue 1Y (TTM)0.79%
Revenue growth 3Y-3.46%
Revenue growth 5Y-7.27%
Sales Q2Q%3.95%
Revenue Next Year5.63%
Revenue Next 2Y6.32%
Revenue Next 3Y6.66%
Revenue Next 5Y7.77%
EBIT growth 1Y8.74%
EBIT growth 3Y7.04%
EBIT growth 5Y3.76%
EBIT Next Year38.8%
EBIT Next 3Y17.64%
EBIT Next 5Y13.95%
FCF growth 1Y-28.91%
FCF growth 3Y-14.75%
FCF growth 5Y36.96%
OCF growth 1Y-22.87%
OCF growth 3Y-12.03%
OCF growth 5Y23.73%