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 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year WH was profitable.
WH had a positive operating cash flow in the past year.
WH had positive earnings in 4 of the past 5 years.
Each year in the past 5 years WH had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.86%, WH is in the better half of the industry, outperforming 78.36% of the companies in the same industry.
WH has a better Return On Equity (57.69%) than 95.52% of its industry peers.
WH has a better Return On Invested Capital (11.31%) than 76.12% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WH is below the industry average of 13.97%.
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
The Profit Margin of WH (23.52%) is better than 97.01% of its industry peers.
In the last couple of years the Profit Margin of WH has grown nicely.
WH has a better Operating Margin (40.00%) than 99.25% of its industry peers.
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 72.39% of its industry peers.
In the last couple of years the Gross Margin of WH has grown nicely.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WH is creating some value.
Compared to 1 year ago, WH has less shares outstanding
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
WH has an Altman-Z score of 1.99. This is not the best score and indicates that WH is in the grey zone with still only limited risk for bankruptcy at the moment.
WH has a Altman-Z score (1.99) which is in line with its industry peers.
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.
The Debt to FCF ratio of WH (11.19) is comparable to the rest of the industry.
WH has a Debt/Equity ratio of 4.29. This is a high value indicating a heavy dependency on external financing.
WH has a Debt to Equity ratio (4.29) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.19 | ||
| Altman-Z | 1.99 |
ROIC/WACC1.48
WACC7.66%
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.
WH has a Current ratio (0.96) which 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.
Looking at the Quick ratio, with a value of 0.96, WH is in line with its industry, outperforming 55.97% of the companies in the same industry.
| 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.
Measured over the past 5 years, WH shows a small growth in Earnings Per Share. The EPS has been growing by 5.83% on average per year.
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
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.
The Revenue is expected to grow by 7.37% on average over the next years.
EPS Next Y11.66%
EPS Next 2Y12.55%
EPS Next 3Y13.2%
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.
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 17.95, WH is valued on the expensive side.
Based on the Price/Earnings ratio, WH is valued a bit cheaper than 73.13% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.35. WH is valued slightly cheaper when compared to this.
WH is valuated correctly with a Price/Forward Earnings ratio of 14.43.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WH indicates a somewhat cheap valuation: WH is cheaper than 71.64% of the companies listed in the same industry.
WH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.95 | ||
| Fwd PE | 14.43 |
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 the industry average as 64.18% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.03 | ||
| EV/EBITDA | 13.55 |
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 13.20% in the coming years.
PEG (NY)1.54
PEG (5Y)3.08
EPS Next 2Y12.55%
EPS Next 3Y13.2%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.06%, WH has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.56, WH pays a bit more dividend than its industry peers.
WH's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
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.
WH's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.83%
EPS Next 2Y12.55%
EPS Next 3Y13.2%
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 Change20.46%
Market Cap6.11B
Analysts86.67
Price Target106.07 (33.71%)
Short Float %3.08%
Short Ratio2.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
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)-1.52%
PT rev (3m)-11.32%
EPS NQ rev (1m)0.29%
EPS NQ rev (3m)-4.71%
EPS NY rev (1m)0.02%
EPS NY rev (3m)-2.23%
Revenue NQ rev (1m)0%
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 | 14.43 | ||
| P/S | 4.3 | ||
| P/FCF | 27.03 | ||
| P/OCF | 22.38 | ||
| P/B | 10.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.55 |
EPS(TTM)4.42
EY5.57%
EPS(NY)5.5
Fwd EY6.93%
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 | 1.99 |
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 Y11.66%
EPS Next 2Y12.55%
EPS Next 3Y13.2%
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%