DIAMONDROCK HOSPITALITY CO (DRH) Stock Fundamental Analysis
USA - NYSE:DRH - US2527843013 - REIT
8.13 USD
-0.08 (-0.97%)
8.1573 USD
+0.03 (+0.34%)
We assign a fundamental rating of 5 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
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.
The reported net income has been mixed in the past 5 years: DRH reported negative net income in multiple years.
In multiple years DRH reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.90%, DRH is in the better half of the industry, outperforming 62.31% of the companies in the same industry.
DRH has a Return On Equity (3.69%) which is in line with its industry peers.
The Return On Invested Capital of DRH (4.68%) is better than 86.92% 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 (4.68%) for DRH is above the 3 year average (4.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 3.69% | ||
| ROIC | 4.68% |
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 5.16%. This is comparable to the rest of the industry: DRH outperforms 51.54% of its industry peers.
DRH's Profit Margin has declined in the last couple of years.
DRH has a worse Operating Margin (14.46%) than 66.92% of its industry peers.
DRH's Operating Margin has improved in the last couple of years.
DRH has a Gross Margin of 27.44%. This is amonst the worse of the industry: DRH underperforms 90.77% of its industry peers.
In the last couple of years the Gross Margin of DRH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.46% | ||
| PM (TTM) | 5.16% | ||
| GM | 27.44% |
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 0.88, we must say that DRH is in the distress zone and has some risk of bankruptcy.
DRH has a better Altman-Z score (0.88) than 71.54% of its industry peers.
The Debt to FCF ratio of DRH is 8.43, which is on the high side as it means it would take DRH, 8.43 years of fcf income to pay off all of its debts.
DRH has a Debt to FCF ratio of 8.43. This is amongst the best in the industry. DRH outperforms 93.08% of its industry peers.
DRH has a Debt/Equity ratio of 0.65. This is a neutral value indicating DRH is somewhat dependend on debt financing.
DRH's Debt to Equity ratio of 0.65 is amongst the best of the industry. DRH outperforms 83.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 8.43 | ||
| Altman-Z | 0.88 |
ROIC/WACC0.66
WACC7.12%
2.3 Liquidity
A Current Ratio of 0.71 indicates that DRH may have some problems paying its short term obligations.
DRH has a Current ratio of 0.71. This is in the lower half of the industry: DRH underperforms 62.31% of its industry peers.
A Quick Ratio of 0.71 indicates that DRH may have some problems paying its short term obligations.
DRH has a Quick ratio of 0.71. This is in the lower half of the industry: DRH underperforms 62.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
DRH shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.34%.
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 1.72% in the past year.
The Revenue has been growing slightly by 3.79% on average over the past years.
EPS 1Y (TTM)-10.34%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%80%
Revenue 1Y (TTM)1.72%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-1.15%
3.2 Future
The Earnings Per Share is expected to grow by 45.64% 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 1.68% on average per year.
EPS Next Y153.99%
EPS Next 2Y86.83%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue Next Year-0.79%
Revenue Next 2Y0.75%
Revenue Next 3Y1.68%
Revenue Next 5YN/A
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.
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 31.27, which means the current valuation is very expensive for DRH.
64.62% of the companies in the same industry are more expensive than DRH, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of DRH to the average of the S&P500 Index (27.20), we can say DRH is valued inline with the index average.
The Price/Forward Earnings ratio is 13.70, which indicates a correct valuation of DRH.
Based on the Price/Forward Earnings ratio, DRH is valued cheaply inside the industry as 97.69% of the companies are valued more expensively.
DRH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.27 | ||
| Fwd PE | 13.7 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DRH indicates a rather cheap valuation: DRH is cheaper than 90.00% of the companies listed in the same industry.
DRH's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DRH is cheaper than 86.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.77 | ||
| EV/EBITDA | 9.54 |
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)0.2
PEG (5Y)N/A
EPS Next 2Y86.83%
EPS Next 3Y45.64%
5. Dividend
5.1 Amount
DRH has a Yearly Dividend Yield of 3.21%. Purely for dividend investing, there may be better candidates out there.
DRH's Dividend Yield is slightly below the industry average, which is at 6.66.
Compared to an average S&P500 Dividend Yield of 2.38, DRH pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.21% |
5.2 History
The dividend of DRH decreases each year by -19.57%.
DRH has paid a dividend for at least 10 years, which is 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 151.27% of its income as dividend. This is not a sustainable payout ratio.
DP151.27%
EPS Next 2Y86.83%
EPS Next 3Y45.64%
8.13
-0.08 (-0.97%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners112.74%
Inst Owner Change-2.49%
Ins Owners0.98%
Ins Owner Change1.85%
Market Cap1.67B
Analysts75
Price Target9.32 (14.64%)
Short Float %7.19%
Short Ratio5.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.21% |
Yearly Dividend0.17
Dividend Growth(5Y)-19.57%
DP151.27%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.33%
Min EPS beat(2)-4.95%
Max EPS beat(2)5.61%
EPS beat(4)1
Avg EPS beat(4)-51.95%
Min EPS beat(4)-195.6%
Max EPS beat(4)5.61%
EPS beat(8)3
Avg EPS beat(8)-26.07%
EPS beat(12)3
Avg EPS beat(12)-24.65%
EPS beat(16)6
Avg EPS beat(16)-0.96%
Revenue beat(2)0
Avg Revenue beat(2)-0.9%
Min Revenue beat(2)-1.48%
Max Revenue beat(2)-0.32%
Revenue beat(4)1
Avg Revenue beat(4)-0.44%
Min Revenue beat(4)-1.53%
Max Revenue beat(4)1.57%
Revenue beat(8)4
Avg Revenue beat(8)0.47%
Revenue beat(12)7
Avg Revenue beat(12)0.55%
Revenue beat(16)11
Avg Revenue beat(16)2.17%
PT rev (1m)-0.49%
PT rev (3m)1%
EPS NQ rev (1m)2.33%
EPS NQ rev (3m)-4.35%
EPS NY rev (1m)-2.29%
EPS NY rev (3m)-1.16%
Revenue NQ rev (1m)-0.5%
Revenue NQ rev (3m)-1.83%
Revenue NY rev (1m)0.27%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.27 | ||
| Fwd PE | 13.7 | ||
| P/S | 1.48 | ||
| P/FCF | 13.77 | ||
| P/OCF | 6.98 | ||
| P/B | 1.06 | ||
| P/tB | 1.06 | ||
| EV/EBITDA | 9.54 |
EPS(TTM)0.26
EY3.2%
EPS(NY)0.59
Fwd EY7.3%
FCF(TTM)0.59
FCFY7.26%
OCF(TTM)1.16
OCFY14.32%
SpS5.49
BVpS7.69
TBVpS7.69
PEG (NY)0.2
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 3.69% | ||
| ROCE | 5.92% | ||
| ROIC | 4.68% | ||
| ROICexc | 4.77% | ||
| ROICexgc | 4.77% | ||
| OM | 14.46% | ||
| PM (TTM) | 5.16% | ||
| GM | 27.44% | ||
| FCFM | 10.76% |
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-Score8
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 8.43 | ||
| Debt/EBITDA | 3.7 | ||
| Cap/Depr | 103.67% | ||
| Cap/Sales | 10.46% | ||
| Interest Coverage | 2.68 | ||
| Cash Conversion | 86.45% | ||
| Profit Quality | 208.42% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 0.88 |
F-Score8
WACC7.12%
ROIC/WACC0.66
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)-10.34%
EPS 3YN/A
EPS 5Y-28.5%
EPS Q2Q%80%
EPS Next Y153.99%
EPS Next 2Y86.83%
EPS Next 3Y45.64%
EPS Next 5YN/A
Revenue 1Y (TTM)1.72%
Revenue growth 3Y25.83%
Revenue growth 5Y3.79%
Sales Q2Q%-1.15%
Revenue Next Year-0.79%
Revenue Next 2Y0.75%
Revenue Next 3Y1.68%
Revenue Next 5YN/A
EBIT growth 1Y23.11%
EBIT growth 3YN/A
EBIT growth 5Y7.52%
EBIT Next Year90.1%
EBIT Next 3Y25.69%
EBIT Next 5YN/A
FCF growth 1Y51.2%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-2.67%
OCF growth 3YN/A
OCF growth 5Y3.03%