CHOICE HOTELS INTL INC (CHH) Stock Fundamental Analysis
NYSE:CHH - New York Stock Exchange, Inc. - US1699051066 - Common Stock - Currency: USD
Taking everything into account, CHH scores 4 out of 10 in our fundamental rating. CHH was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. CHH scores excellent on profitability, but there are concerns on its financial health. CHH does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
CHH had positive earnings in the past year.
CHH had a positive operating cash flow in the past year.
CHH had positive earnings in 4 of the past 5 years.
CHH had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
CHH's Return On Assets of 9.89% is amongst the best of the industry. CHH outperforms 84.73% of its industry peers.
The Return On Invested Capital of CHH (18.03%) is better than 87.79% of its industry peers.
CHH had an Average Return On Invested Capital over the past 3 years of 23.68%. This is significantly above the industry average of 10.79%.
The 3 year average ROIC (23.68%) for CHH is well above the current ROIC(18.03%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.89% | ||
| ROE | N/A | ||
| ROIC | 18.03% |
ROA(3y)13.78%
ROA(5y)12.41%
ROE(3y)348.02%
ROE(5y)N/A
ROIC(3y)23.68%
ROIC(5y)20.58%
1.3 Margins
CHH has a Profit Margin of 16.19%. This is amongst the best in the industry. CHH outperforms 88.55% of its industry peers.
CHH's Profit Margin has declined in the last couple of years.
CHH has a Operating Margin of 31.38%. This is amongst the best in the industry. CHH outperforms 96.95% of its industry peers.
In the last couple of years the Operating Margin of CHH has remained more or less at the same level.
The Gross Margin of CHH (50.15%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of CHH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.38% | ||
| PM (TTM) | 16.19% | ||
| GM | 50.15% |
OM growth 3Y20.33%
OM growth 5Y-0.13%
PM growth 3Y19.78%
PM growth 5Y-4.22%
GM growth 3Y5.29%
GM growth 5Y0.26%
2. Health
2.1 Basic Checks
CHH has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
CHH has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
CHH has an Altman-Z score of 3.85. This indicates that CHH is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CHH (3.85) is better than 86.26% of its industry peers.
The Debt to FCF ratio of CHH is 13.52, which is on the high side as it means it would take CHH, 13.52 years of fcf income to pay off all of its debts.
CHH's Debt to FCF ratio of 13.52 is in line compared to the rest of the industry. CHH outperforms 51.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.52 | ||
| Altman-Z | 3.85 |
ROIC/WACC1.99
WACC9.08%
2.3 Liquidity
A Current Ratio of 0.71 indicates that CHH may have some problems paying its short term obligations.
The Current ratio of CHH (0.71) is worse than 64.12% of its industry peers.
CHH has a Quick Ratio of 0.71. This is a bad value and indicates that CHH is not financially healthy enough and could expect problems in meeting its short term obligations.
CHH has a Quick ratio of 0.71. This is comparable to the rest of the industry: CHH outperforms 40.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.56% over the past year.
CHH shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.82% yearly.
EPS 1Y (TTM)12.56%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%7.64%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%8.75%
3.2 Future
The Earnings Per Share is expected to grow by 9.47% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.18% on average over the next years.
EPS Next Y3.34%
EPS Next 2Y4.59%
EPS Next 3Y3.84%
EPS Next 5Y9.47%
Revenue Next Year3.4%
Revenue Next 2Y3.68%
Revenue Next 3Y3.89%
Revenue Next 5Y5.18%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 21.80, CHH is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of CHH indicates a somewhat cheap valuation: CHH is cheaper than 66.41% of the companies listed in the same industry.
CHH is valuated rather cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 21.10, the valuation of CHH can be described as rather expensive.
Based on the Price/Forward Earnings ratio, CHH is valued a bit cheaper than the industry average as 63.36% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, CHH is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.8 | ||
| Fwd PE | 21.1 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as CHH.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CHH is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.69 | ||
| EV/EBITDA | 16.61 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CHH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)6.53
PEG (5Y)2.22
EPS Next 2Y4.59%
EPS Next 3Y3.84%
5. Dividend
5.1 Amount
With a yearly dividend of 0.76%, CHH is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.08, CHH pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.76, CHH pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
5.2 History
The dividend of CHH has a limited annual growth rate of 5.08%.
CHH has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.08%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
CHH pays out 22.61% of its income as dividend. This is a sustainable payout ratio.
CHH's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.61%
EPS Next 2Y4.59%
EPS Next 3Y3.84%
150.42
-1.86 (-1.22%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners66.18%
Inst Owner Change-91.12%
Ins Owners14.24%
Ins Owner Change-0.86%
Market Cap7.06B
Analysts54.78
Price Target138.39 (-8%)
Short Float %19.89%
Short Ratio18.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
Yearly Dividend1.11
Dividend Growth(5Y)5.08%
DP22.61%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.54%
Min EPS beat(2)-2.15%
Max EPS beat(2)15.24%
EPS beat(4)3
Avg EPS beat(4)7.55%
Min EPS beat(4)-2.15%
Max EPS beat(4)15.24%
EPS beat(8)6
Avg EPS beat(8)7.3%
EPS beat(12)8
Avg EPS beat(12)6.58%
EPS beat(16)10
Avg EPS beat(16)6.19%
Revenue beat(2)0
Avg Revenue beat(2)-2.01%
Min Revenue beat(2)-2.33%
Max Revenue beat(2)-1.68%
Revenue beat(4)0
Avg Revenue beat(4)-3.11%
Min Revenue beat(4)-4.23%
Max Revenue beat(4)-1.68%
Revenue beat(8)3
Avg Revenue beat(8)-0.8%
Revenue beat(12)7
Avg Revenue beat(12)8.53%
Revenue beat(16)9
Avg Revenue beat(16)9.32%
PT rev (1m)-0.05%
PT rev (3m)2.67%
EPS NQ rev (1m)2.26%
EPS NQ rev (3m)2.26%
EPS NY rev (1m)0.81%
EPS NY rev (3m)2.15%
Revenue NQ rev (1m)-0.24%
Revenue NQ rev (3m)-0.24%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.8 | ||
| Fwd PE | 21.1 | ||
| P/S | 4.54 | ||
| P/FCF | 52.69 | ||
| P/OCF | 24.68 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.61 |
EPS(TTM)6.9
EY4.59%
EPS(NY)7.13
Fwd EY4.74%
FCF(TTM)2.85
FCFY1.9%
OCF(TTM)6.09
OCFY4.05%
SpS33.12
BVpS-2.05
TBVpS-25.16
PEG (NY)6.53
PEG (5Y)2.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.89% | ||
| ROE | N/A | ||
| ROCE | 23.61% | ||
| ROIC | 18.03% | ||
| ROICexc | 18.56% | ||
| ROICexgc | 40.35% | ||
| OM | 31.38% | ||
| PM (TTM) | 16.19% | ||
| GM | 50.15% | ||
| FCFM | 8.62% |
ROA(3y)13.78%
ROA(5y)12.41%
ROE(3y)348.02%
ROE(5y)N/A
ROIC(3y)23.68%
ROIC(5y)20.58%
ROICexc(3y)28.86%
ROICexc(5y)24.18%
ROICexgc(3y)77.98%
ROICexgc(5y)58.91%
ROCE(3y)31.01%
ROCE(5y)26.95%
ROICexcg growth 3Y77.47%
ROICexcg growth 5Y5.72%
ROICexc growth 3Y38.8%
ROICexc growth 5Y-3.89%
OM growth 3Y20.33%
OM growth 5Y-0.13%
PM growth 3Y19.78%
PM growth 5Y-4.22%
GM growth 3Y5.29%
GM growth 5Y0.26%
F-Score5
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.52 | ||
| Debt/EBITDA | 3.41 | ||
| Cap/Depr | 354.99% | ||
| Cap/Sales | 9.78% | ||
| Interest Coverage | 6.77 | ||
| Cash Conversion | 53.91% | ||
| Profit Quality | 53.24% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 3.85 |
F-Score5
WACC9.08%
ROIC/WACC1.99
Cap/Depr(3y)307.64%
Cap/Depr(5y)459.59%
Cap/Sales(3y)7.26%
Cap/Sales(5y)9.44%
Profit Quality(3y)86.05%
Profit Quality(5y)75.05%
High Growth Momentum
Growth
EPS 1Y (TTM)12.56%
EPS 3Y17.16%
EPS 5Y9.82%
EPS Q2Q%7.64%
EPS Next Y3.34%
EPS Next 2Y4.59%
EPS Next 3Y3.84%
EPS Next 5Y9.47%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%8.75%
Revenue Next Year3.4%
Revenue Next 2Y3.68%
Revenue Next 3Y3.89%
Revenue Next 5Y5.18%
EBIT growth 1Y-14.9%
EBIT growth 3Y51.47%
EBIT growth 5Y8.06%
EBIT Next Year33.32%
EBIT Next 3Y12.17%
EBIT Next 5Y10%
FCF growth 1Y-56.07%
FCF growth 3Y33.4%
FCF growth 5Y-1.29%
OCF growth 1Y-29.17%
OCF growth 3Y39.14%
OCF growth 5Y4.07%