9.2 USD
-0.25 (-2.65%)
Taking everything into account, DRH scores 5 out of 10 in our fundamental rating. DRH was compared to 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- DRH had positive earnings in the past year.
- In the past year DRH had a positive cash flow from operations.
- 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
- The Return On Assets of DRH (1.72%) is better than 60.48% of its industry peers.
- DRH has a Return On Equity (3.45%) which is in line with its industry peers.
- DRH's Return On Invested Capital of 4.57% is amongst the best of the industry. DRH outperforms 88.71% of its industry peers.
- DRH had an Average Return On Invested Capital over the past 3 years of 4.14%. This 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 (4.81%) which is in line with its industry peers.
- DRH's Profit Margin has declined in the last couple of years.
- DRH has a worse Operating Margin (14.48%) than 66.13% of its industry peers.
- DRH's Operating Margin has improved in the last couple of years.
- With a Gross Margin value of 27.54%, DRH is not doing good in the industry: 89.52% of the companies in the same industry are doing better.
- DRH's Gross Margin has improved in the last couple of years.
| 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DRH is destroying value.
- The number of shares outstanding for DRH has been reduced compared to 1 year ago.
- Compared to 5 years ago, DRH has more shares outstanding
- The debt/assets ratio for DRH has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.96, we must say that DRH is in the distress zone and has some risk of bankruptcy.
- DRH's Altman-Z score of 0.96 is fine compared to the rest of the industry. DRH outperforms 72.58% of its industry peers.
- The Debt to FCF ratio of DRH is 8.03, which is on the high side as it means it would take DRH, 8.03 years of fcf income to pay off all of its debts.
- DRH has a better Debt to FCF ratio (8.03) than 95.16% 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 has a better Debt to Equity ratio (0.70) than 83.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 8.03 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.64
WACC7.19%
2.3 Liquidity
- DRH has a Current 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.
- DRH's Current ratio of 0.97 is in line compared to the rest of the industry. DRH outperforms 50.00% of its industry peers.
- A Quick Ratio of 0.97 indicates that DRH may have some problems paying its short term obligations.
- DRH has a Quick ratio (0.97) which is comparable to the rest of the 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.
- The earnings per share for DRH have been decreasing by -28.50% on average. This is quite bad
- DRH shows a small growth in Revenue. In the last year, the Revenue has grown by 0.95%.
- The Revenue has been growing slightly by 3.79% on average over the past years.
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
- Based on estimates for the next years, DRH will show a small growth in Revenue. The Revenue will grow by 1.93% on average per year.
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
- 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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 36.80, DRH can be considered very expensive at the moment.
- DRH's Price/Earnings ratio is in line with the industry average.
- DRH's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.25.
- The Price/Forward Earnings ratio is 18.59, which indicates a rather expensive current valuation of DRH.
- 95.16% of the companies in the same industry are more expensive than DRH, based on the Price/Forward Earnings ratio.
- DRH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.8 | ||
| Fwd PE | 18.59 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, DRH is valued cheaper than 85.48% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, DRH is valued cheaply inside the industry as 85.48% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.69 | ||
| EV/EBITDA | 10.42 |
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. 82.26% of the companies listed in the same industry pay a better dividend than DRH!
- DRH's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| 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.
- The dividend of DRH decreased in the last 3 years.
Dividend Growth(5Y)-19.57%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 180.94% of the earnings are spent on dividend by DRH. 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 5 / 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 5 / 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 36.8 and the Price/Book (PB) ratio is 1.19.
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.