DIAMONDROCK HOSPITALITY CO (DRH) Stock Fundamental Analysis
NYSE:DRH - New York Stock Exchange, Inc. - US2527843013 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to DRH. DRH was compared to 130 industry peers in the Diversified REITs industry. DRH has only an average score on both its financial health and profitability. DRH has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year DRH was profitable.
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
DRH has a Return On Assets of 1.35%. This is comparable to the rest of the industry: DRH outperforms 60.00% of its industry peers.
The Return On Equity of DRH (2.67%) is comparable to the rest of the industry.
DRH has a better Return On Invested Capital (4.15%) than 77.69% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DRH is in line with the industry average of 3.16%.
The 3 year average ROIC (4.14%) for DRH is below the current ROIC(4.15%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 2.67% | ||
| ROIC | 4.15% |
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
The Profit Margin of DRH (3.70%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of DRH has declined.
DRH's Operating Margin of 13.07% is on the low side compared to the rest of the industry. DRH is outperformed by 70.00% of its industry peers.
In the last couple of years the Operating Margin of DRH has grown nicely.
With a Gross Margin value of 27.68%, DRH is not doing good in the industry: 90.77% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of DRH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.07% | ||
| PM (TTM) | 3.7% | ||
| GM | 27.68% |
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.
Compared to 1 year ago, DRH has less shares outstanding
DRH has more shares outstanding than it did 5 years ago.
DRH has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.82, we must say that DRH is in the distress zone and has some risk of bankruptcy.
DRH has a better Altman-Z score (0.82) than 67.69% of its industry peers.
The Debt to FCF ratio of DRH is 10.72, which is on the high side as it means it would take DRH, 10.72 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DRH (10.72) is better than 90.77% 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.
The Debt to Equity ratio of DRH (0.70) is better than 78.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 10.72 | ||
| Altman-Z | 0.82 |
ROIC/WACC0.49
WACC8.55%
2.3 Liquidity
DRH has a Current Ratio of 0.89. 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 has a Current ratio of 0.89. This is comparable to the rest of the industry: DRH outperforms 47.69% of its industry peers.
DRH has a Quick Ratio of 0.89. 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 Quick ratio of 0.89 is in line compared to the rest of the industry. DRH outperforms 48.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
DRH shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -50.00%.
DRH shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -28.50% yearly.
The Revenue has been growing slightly by 3.73% in the past year.
DRH shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.79% yearly.
EPS 1Y (TTM)-50%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%33.33%
Revenue 1Y (TTM)3.73%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-0.61%
3.2 Future
Based on estimates for the next years, DRH will show a very strong growth in Earnings Per Share. The EPS will grow by 45.64% on average per year.
DRH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.35% yearly.
EPS Next Y159.93%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue Next Year-0.53%
Revenue Next 2Y0.79%
Revenue Next 3Y2.35%
Revenue Next 5YN/A
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
DRH is valuated quite expensively with a Price/Earnings ratio of 42.56.
DRH's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 27.15. DRH is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 16.49, which indicates a correct valuation of DRH.
Based on the Price/Forward Earnings ratio, DRH is valued cheaply inside the industry as 94.62% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.60. DRH is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.56 | ||
| Fwd PE | 16.49 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DRH is valued cheaply inside the industry as 82.31% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, DRH is valued cheaply inside the industry as 85.38% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.5 | ||
| EV/EBITDA | 9.97 |
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.
A more expensive valuation may be justified as DRH's earnings are expected to grow with 45.64% in the coming years.
PEG (NY)0.27
PEG (5Y)N/A
EPS Next 2Y65.32%
EPS Next 3Y45.64%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.84%, DRH has a reasonable but not impressive dividend return.
With a Dividend Yield of 2.84, DRH pays less dividend than the industry average, which is at 6.64. 80.77% of the companies listed in the same industry pay a better dividend than DRH!
Compared to an average S&P500 Dividend Yield of 2.42, DRH has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
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
185.63% of the earnings are spent on dividend by DRH. This is not a sustainable payout ratio.
DP185.63%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
7.66
-0.12 (-1.54%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners111.41%
Inst Owner Change2.3%
Ins Owners0.97%
Ins Owner Change6.16%
Market Cap1.58B
Analysts75
Price Target9.23 (20.5%)
Short Float %6.92%
Short Ratio4.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
Yearly Dividend0.17
Dividend Growth(5Y)-19.57%
DP185.63%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-94.99%
Min EPS beat(2)-195.6%
Max EPS beat(2)5.61%
EPS beat(4)1
Avg EPS beat(4)-61.36%
Min EPS beat(4)-195.6%
Max EPS beat(4)5.61%
EPS beat(8)3
Avg EPS beat(8)-26.26%
EPS beat(12)4
Avg EPS beat(12)-17.39%
EPS beat(16)7
Avg EPS beat(16)1.96%
Revenue beat(2)1
Avg Revenue beat(2)0.04%
Min Revenue beat(2)-1.48%
Max Revenue beat(2)1.57%
Revenue beat(4)2
Avg Revenue beat(4)0.01%
Min Revenue beat(4)-1.53%
Max Revenue beat(4)1.57%
Revenue beat(8)4
Avg Revenue beat(8)0.14%
Revenue beat(12)8
Avg Revenue beat(12)0.99%
Revenue beat(16)12
Avg Revenue beat(16)2.91%
PT rev (1m)-1.97%
PT rev (3m)-10.66%
EPS NQ rev (1m)2.7%
EPS NQ rev (3m)-1.3%
EPS NY rev (1m)1.16%
EPS NY rev (3m)-1.69%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-1.4%
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)-2.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.56 | ||
| Fwd PE | 16.49 | ||
| P/S | 1.4 | ||
| P/FCF | 15.5 | ||
| P/OCF | 7.16 | ||
| P/B | 1.01 | ||
| P/tB | 1.01 | ||
| EV/EBITDA | 9.97 |
EPS(TTM)0.18
EY2.35%
EPS(NY)0.46
Fwd EY6.07%
FCF(TTM)0.49
FCFY6.45%
OCF(TTM)1.07
OCFY13.97%
SpS5.47
BVpS7.59
TBVpS7.59
PEG (NY)0.27
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 2.67% | ||
| ROCE | 5.25% | ||
| ROIC | 4.15% | ||
| ROICexc | 4.31% | ||
| ROICexgc | 4.31% | ||
| OM | 13.07% | ||
| PM (TTM) | 3.7% | ||
| GM | 27.68% | ||
| FCFM | 9.04% |
ROA(3y)2.22%
ROA(5y)-2.57%
ROE(3y)4.44%
ROE(5y)-4.68%
ROIC(3y)4.14%
ROIC(5y)N/A
ROICexc(3y)4.27%
ROICexc(5y)N/A
ROICexgc(3y)4.27%
ROICexgc(5y)N/A
ROCE(3y)5.24%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y9.26%
ROICexc growth 3YN/A
ROICexc growth 5Y9.26%
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%
F-Score7
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 10.72 | ||
| Debt/EBITDA | 4.19 | ||
| Cap/Depr | 104.99% | ||
| Cap/Sales | 10.53% | ||
| Interest Coverage | 2.38 | ||
| Cash Conversion | 84.71% | ||
| Profit Quality | 244.18% | ||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 0.82 |
F-Score7
WACC8.55%
ROIC/WACC0.49
Cap/Depr(3y)145.53%
Cap/Depr(5y)112.1%
Cap/Sales(3y)15.36%
Cap/Sales(5y)16.86%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-50%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%33.33%
EPS Next Y159.93%
EPS Next 2Y65.32%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue 1Y (TTM)3.73%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-0.61%
Revenue Next Year-0.53%
Revenue Next 2Y0.79%
Revenue Next 3Y2.35%
Revenue Next 5YN/A
EBIT growth 1Y0.66%
EBIT growth 3YN/A
EBIT growth 5Y7.52%
EBIT Next Year91.51%
EBIT Next 3Y25.89%
EBIT Next 5YN/A
FCF growth 1Y83.39%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-12.09%
OCF growth 3YN/A
OCF growth 5Y3.03%