WYNDHAM HOTELS & RESORTS INC (WH) Stock Fundamental Analysis
NYSE:WH - New York Stock Exchange, Inc. - US98311A1051 - Common Stock - Currency: USD
WH gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 135 industry peers in the Hotels, Restaurants & Leisure industry. WH scores excellent on profitability, but there are concerns on its financial health. WH has a decent growth rate and is not valued too expensively.
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.
Of the past 5 years WH 4 years were profitable.
WH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WH has a Return On Assets of 7.86%. This is in the better half of the industry: WH outperforms 78.52% of its industry peers.
With an excellent Return On Equity value of 57.69%, WH belongs to the best of the industry, outperforming 95.56% of the companies in the same industry.
WH has a better Return On Invested Capital (11.31%) than 77.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WH is below the industry average of 14.12%.
The last Return On Invested Capital (11.31%) for WH is above the 3 year average (10.92%), which is a sign of increasing profitability.
| 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 has a Profit Margin of 23.52%. This is amongst the best in the industry. WH outperforms 96.30% of its industry peers.
WH's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 40.00%, WH belongs to the top of the industry, outperforming 99.26% of the companies in the same industry.
WH's Operating Margin has improved in the last couple of years.
WH's Gross Margin of 59.58% is fine compared to the rest of the industry. WH outperforms 71.11% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WH is still creating some value.
WH has less shares outstanding than it did 1 year ago.
WH has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WH is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.07 indicates that WH is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.07, WH is doing good in the industry, outperforming 62.96% of the companies in the same industry.
The Debt to FCF ratio of WH is 11.19, which is on the high side as it means it would take WH, 11.19 years of fcf income to pay off all of its debts.
WH has a Debt to FCF ratio (11.19) which is in line with its industry peers.
A Debt/Equity ratio of 4.29 is on the high side and indicates that WH has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 4.29, WH is in line with its industry, outperforming 42.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.19 | ||
| Altman-Z | 2.07 |
ROIC/WACC1.31
WACC8.65%
2.3 Liquidity
WH has a Current 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.
The Current ratio of WH (0.96) is comparable to the rest of the 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 of 0.96. This is comparable to the rest of the industry: WH outperforms 57.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.96 |
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 2.16% in the past year.
Measured over the past years, WH shows a decrease in Revenue. The Revenue has been decreasing by -7.27% on average per year.
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
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 Y11.64%
EPS Next 2Y12.48%
EPS Next 3Y13.26%
EPS Next 5Y14.9%
Revenue Next Year3.71%
Revenue Next 2Y5.02%
Revenue Next 3Y5.89%
Revenue Next 5Y7.77%
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.
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
WH is valuated rather expensively with a Price/Earnings ratio of 19.11.
68.89% of the companies in the same industry are more expensive than WH, based on the Price/Earnings ratio.
WH is valuated rather cheaply when we compare the Price/Earnings ratio to 25.91, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 15.38, WH is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WH indicates a somewhat cheap valuation: WH is cheaper than 71.11% of the companies listed in the same industry.
WH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.11 | ||
| Fwd PE | 15.38 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WH.
The rest of the industry has a similar Price/Free Cash Flow ratio as WH.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.96 | ||
| EV/EBITDA | 14.31 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of WH may justify a higher PE ratio.
WH's earnings are expected to grow with 13.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.64
PEG (5Y)3.28
EPS Next 2Y12.48%
EPS Next 3Y13.26%
5. Dividend
5.1 Amount
WH has a Yearly Dividend Yield of 1.91%.
The stock price of WH dropped by -22.38% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 3.57, WH pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, WH has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
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
36.83% of the earnings are spent on dividend by WH. This is a low number and 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%
84.47
-0.61 (-0.72%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners98.77%
Inst Owner Change-4.53%
Ins Owners2.13%
Ins Owner Change20.88%
Market Cap6.54B
Analysts85.22
Price Target107.7 (27.5%)
Short Float %3.05%
Short Ratio2.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
Yearly Dividend1.53
Dividend Growth(5Y)5.55%
DP36.83%
Div Incr Years3
Div Non Decr Years3
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)-9.8%
PT rev (3m)-2.23%
EPS NQ rev (1m)-3.7%
EPS NQ rev (3m)-6.77%
EPS NY rev (1m)-1.8%
EPS NY rev (3m)-1.5%
Revenue NQ rev (1m)-2.81%
Revenue NQ rev (3m)-1.93%
Revenue NY rev (1m)-2.01%
Revenue NY rev (3m)-2.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.11 | ||
| Fwd PE | 15.38 | ||
| P/S | 4.61 | ||
| P/FCF | 28.96 | ||
| P/OCF | 23.97 | ||
| P/B | 11.3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.31 |
EPS(TTM)4.42
EY5.23%
EPS(NY)5.49
Fwd EY6.5%
FCF(TTM)2.92
FCFY3.45%
OCF(TTM)3.52
OCFY4.17%
SpS18.33
BVpS7.47
TBVpS-32.14
PEG (NY)1.64
PEG (5Y)3.28
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 | 2.07 |
F-Score6
WACC8.65%
ROIC/WACC1.31
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 5Y14.9%
Revenue 1Y (TTM)2.16%
Revenue growth 3Y-3.46%
Revenue growth 5Y-7.27%
Sales Q2Q%3.95%
Revenue Next Year3.71%
Revenue Next 2Y5.02%
Revenue Next 3Y5.89%
Revenue Next 5Y7.77%
EBIT growth 1Y12.25%
EBIT growth 3Y7.04%
EBIT growth 5Y3.76%
EBIT Next Year38.8%
EBIT Next 3Y17.64%
EBIT Next 5Y13.95%
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%