9.47 USD
-0.13 (-1.35%)
9.41 USD
-0.06 (-0.63%)
DRH gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 124 industry peers in the Diversified REITs industry. Both the profitability and the financial health of DRH get a neutral evaluation. Nothing too spectacular is happening here. DRH has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- DRH had positive earnings in the past year.
- DRH had a positive operating cash flow in the past year.
- In multiple years DRH reported negative net income over the last 5 years.
- The reported operating cash flow has been mixed in the past 5 years: DRH reported negative operating cash flow in multiple years.
1.2 Ratios
- DRH has a Return On Assets (1.72%) which is in line with its industry peers.
- The Return On Equity of DRH (3.45%) is comparable to the rest of the industry.
- DRH has a Return On Invested Capital of 4.57%. This is amongst the best in the industry. DRH outperforms 88.80% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for DRH is in line with the industry average of 3.05%.
- The last Return On Invested Capital (4.57%) for DRH is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.72% | ||
| ROE | 3.45% | ||
| ROIC | 4.57% |
ROA(3y)2.22%
ROA(5y)-2.57%
ROE(3y)4.44%
ROE(5y)-4.68%
ROIC(3y)4.14%
ROIC(5y)N/A
1.3 Margins
- DRH has a Profit Margin of 4.81%. This is comparable to the rest of the industry: DRH outperforms 50.40% of its industry peers.
- In the last couple of years the Profit Margin of DRH has declined.
- DRH has a Operating Margin of 14.48%. This is in the lower half of the industry: DRH underperforms 66.40% of its industry peers.
- In the last couple of years the Operating Margin of DRH has grown nicely.
- DRH's Gross Margin of 27.54% is on the low side compared to the rest of the industry. DRH is outperformed by 89.60% of its industry peers.
- In the last couple of years the Gross Margin of DRH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.48% | ||
| PM (TTM) | 4.81% | ||
| GM | 27.54% |
OM growth 3YN/A
OM growth 5Y3.59%
PM growth 3YN/A
PM growth 5Y-29.59%
GM growth 3Y11.38%
GM growth 5Y1.6%
2. Health
2.1 Basic Checks
- DRH has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- DRH has less shares outstanding than it did 1 year ago.
- DRH has more shares outstanding than it did 5 years ago.
- DRH has a better debt/assets ratio than last year.
2.2 Solvency
- DRH has an Altman-Z score of 0.96. This is a bad value and indicates that DRH is not financially healthy and even has some risk of bankruptcy.
- With a decent Altman-Z score value of 0.96, DRH is doing good in the industry, outperforming 72.80% of the companies in the same industry.
- DRH has a debt to FCF ratio of 8.03. This is a slightly negative value and a sign of low solvency as DRH would need 8.03 years to pay back of all of its debts.
- DRH has a better Debt to FCF ratio (8.03) than 95.20% of its industry peers.
- DRH has a Debt/Equity ratio of 0.70. This is a neutral value indicating DRH is somewhat dependend on debt financing.
- DRH's Debt to Equity ratio of 0.70 is amongst the best of the industry. DRH outperforms 83.20% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 8.03 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.63
WACC7.2%
2.3 Liquidity
- A Current Ratio of 0.97 indicates that DRH may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.97, DRH is in line with its industry, outperforming 49.60% of the companies in the same industry.
- DRH has a Quick Ratio of 0.97. This is a bad value and indicates that DRH is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.97, DRH perfoms like the industry average, outperforming 52.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
- The earnings per share for DRH have decreased strongly by -10.71% in the last year.
- Measured over the past years, DRH shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -28.50% on average per year.
- The Revenue has been growing slightly by 0.95% in the past year.
- Measured over the past years, DRH shows a small growth in Revenue. The Revenue has been growing by 3.79% on average per year.
EPS 1Y (TTM)-10.71%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%-9.09%
Revenue 1Y (TTM)0.95%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%0.09%
3.2 Future
- The Earnings Per Share is expected to grow by 46.57% on average over the next years. This is a very strong growth
- DRH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.93% yearly.
EPS Next Y143.59%
EPS Next 2Y70.62%
EPS Next 3Y46.57%
EPS Next 5YN/A
Revenue Next Year-0.44%
Revenue Next 2Y0.88%
Revenue Next 3Y1.33%
Revenue Next 5Y1.93%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 37.88, which means the current valuation is very expensive for DRH.
- Compared to the rest of the industry, the Price/Earnings ratio of DRH is on the same level as its industry peers.
- The average S&P500 Price/Earnings ratio is at 27.21. DRH is valued slightly more expensive when compared to this.
- DRH is valuated rather expensively with a Price/Forward Earnings ratio of 19.14.
- Based on the Price/Forward Earnings ratio, DRH is valued cheaply inside the industry as 95.20% of the companies are valued more expensively.
- When comparing the Price/Forward Earnings ratio of DRH to the average of the S&P500 Index (25.98), we can say DRH is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.88 | ||
| Fwd PE | 19.14 |
4.2 Price Multiples
- DRH's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DRH is cheaper than 84.80% of the companies in the same industry.
- 84.80% of the companies in the same industry are more expensive than DRH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.09 | ||
| EV/EBITDA | 10.43 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- DRH's earnings are expected to grow with 46.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.26
PEG (5Y)N/A
EPS Next 2Y70.62%
EPS Next 3Y46.57%
5. Dividend
5.1 Amount
- DRH has a Yearly Dividend Yield of 2.81%. Purely for dividend investing, there may be better candidates out there.
- With a Dividend Yield of 2.81, DRH pays less dividend than the industry average, which is at 6.82. 81.60% of the companies listed in the same industry pay a better dividend than DRH!
- Compared to an average S&P500 Dividend Yield of 1.81, DRH pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.81% |
5.2 History
- The dividend of DRH decreases each year by -19.57%.
- DRH has been paying a dividend for at least 10 years, so it has a reliable track record.
- DRH has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-19.57%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- DRH pays out 180.94% of its income as dividend. This is not a sustainable payout ratio.
DP180.94%
EPS Next 2Y70.62%
EPS Next 3Y46.57%
DIAMONDROCK HOSPITALITY CO / DRH FAQ
What is the ChartMill fundamental rating of DIAMONDROCK HOSPITALITY CO (DRH) stock?
ChartMill assigns a fundamental rating of 4 / 10 to DRH.
What is the valuation status for DRH stock?
ChartMill assigns a valuation rating of 6 / 10 to DIAMONDROCK HOSPITALITY CO (DRH). This can be considered as Fairly Valued.
What is the profitability of DRH stock?
DIAMONDROCK HOSPITALITY CO (DRH) has a profitability rating of 4 / 10.
What is the valuation of DIAMONDROCK HOSPITALITY CO based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DIAMONDROCK HOSPITALITY CO (DRH) is 37.88 and the Price/Book (PB) ratio is 1.23.
What is the earnings growth outlook for DIAMONDROCK HOSPITALITY CO?
The Earnings per Share (EPS) of DIAMONDROCK HOSPITALITY CO (DRH) is expected to grow by 143.59% in the next year.