INTERCONTINENTAL HOTELS-ADR (IHG) Stock Fundamental Analysis
NYSE:IHG - New York Stock Exchange, Inc. - US45857P8068 - ADR - Currency: USD
Overall IHG gets a fundamental rating of 5 out of 10. We evaluated IHG against 135 industry peers in the Hotels, Restaurants & Leisure industry. While IHG has a great profitability rating, there are some minor concerns on its financial health. IHG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
IHG had positive earnings in the past year.
In the past year IHG had a positive cash flow from operations.
Of the past 5 years IHG 4 years were profitable.
Each year in the past 5 years IHG had a positive operating cash flow.
1.2 Ratios
IHG has a Return On Assets of 13.94%. This is amongst the best in the industry. IHG outperforms 92.37% of its industry peers.
IHG has a better Return On Invested Capital (29.09%) than 95.42% of its industry peers.
IHG had an Average Return On Invested Capital over the past 3 years of 19.76%. This is significantly above the industry average of 10.79%.
The last Return On Invested Capital (29.09%) for IHG is above the 3 year average (19.76%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.94% | ||
| ROE | N/A | ||
| ROIC | 29.09% |
ROA(3y)10.04%
ROA(5y)6.83%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)19.76%
ROIC(5y)16.29%
1.3 Margins
IHG has a Profit Margin of 13.52%. This is amongst the best in the industry. IHG outperforms 80.92% of its industry peers.
In the last couple of years the Profit Margin of IHG has grown nicely.
IHG has a Operating Margin of 21.02%. This is in the better half of the industry: IHG outperforms 78.63% of its industry peers.
IHG's Operating Margin has improved in the last couple of years.
IHG has a worse Gross Margin (29.32%) than 79.39% of its industry peers.
In the last couple of years the Gross Margin of IHG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.02% | ||
| PM (TTM) | 13.52% | ||
| GM | 29.32% |
OM growth 3Y68.41%
OM growth 5Y5.99%
PM growth 3YN/A
PM growth 5Y14.92%
GM growth 3Y13.51%
GM growth 5Y3.35%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so IHG is creating value.
Compared to 1 year ago, IHG has less shares outstanding
Compared to 5 years ago, IHG has less shares outstanding
IHG has a worse debt/assets ratio than last year.
2.2 Solvency
IHG has an Altman-Z score of 2.74. This is not the best score and indicates that IHG is in the grey zone with still only limited risk for bankruptcy at the moment.
IHG has a better Altman-Z score (2.74) than 71.76% of its industry peers.
IHG has a debt to FCF ratio of 5.44. This is a neutral value as IHG would need 5.44 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.44, IHG is in the better half of the industry, outperforming 73.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.44 | ||
| Altman-Z | 2.74 |
ROIC/WACC3.57
WACC8.15%
2.3 Liquidity
IHG has a Current Ratio of 0.85. This is a bad value and indicates that IHG is not financially healthy enough and could expect problems in meeting its short term obligations.
IHG has a Current ratio (0.85) which is comparable to the rest of the industry.
A Quick Ratio of 0.85 indicates that IHG may have some problems paying its short term obligations.
The Quick ratio of IHG (0.85) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
IHG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.99%, which is quite good.
The Earnings Per Share has been growing slightly by 5.41% on average over the past years.
IHG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.16%.
IHG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.29% yearly.
EPS 1Y (TTM)15.99%
EPS 3Y128.96%
EPS 5Y5.41%
EPS Q2Q%11.48%
Revenue 1Y (TTM)9.16%
Revenue growth 3Y24.54%
Revenue growth 5Y1.29%
Sales Q2Q%7.47%
3.2 Future
The Earnings Per Share is expected to grow by 13.18% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.99% on average over the next years.
EPS Next Y19.68%
EPS Next 2Y17.73%
EPS Next 3Y15.83%
EPS Next 5Y13.18%
Revenue Next Year7.51%
Revenue Next 2Y7.1%
Revenue Next 3Y6.64%
Revenue Next 5Y6.99%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
IHG is valuated quite expensively with a Price/Earnings ratio of 29.94.
IHG's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of IHG to the average of the S&P500 Index (29.63), we can say IHG is valued inline with the index average.
IHG is valuated rather expensively with a Price/Forward Earnings ratio of 22.81.
60.31% of the companies in the same industry are more expensive than IHG, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of IHG to the average of the S&P500 Index (22.68), we can say IHG is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.94 | ||
| Fwd PE | 22.81 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IHG is valued a bit more expensive than 67.94% of the companies in the same industry.
67.18% of the companies in the same industry are more expensive than IHG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.82 | ||
| EV/EBITDA | 21.75 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of IHG may justify a higher PE ratio.
A more expensive valuation may be justified as IHG's earnings are expected to grow with 15.83% in the coming years.
PEG (NY)1.52
PEG (5Y)5.53
EPS Next 2Y17.73%
EPS Next 3Y15.83%
5. Dividend
5.1 Amount
IHG has a Yearly Dividend Yield of 1.34%. Purely for dividend investing, there may be better candidates out there.
IHG's Dividend Yield is a higher than the industry average which is at 3.06.
Compared to an average S&P500 Dividend Yield of 2.29, IHG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
5.2 History
The dividend of IHG has a limited annual growth rate of 5.49%.
IHG has been paying a dividend for at least 10 years, so it has a reliable track record.
IHG has decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.49%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
39.34% of the earnings are spent on dividend by IHG. This is a low number and sustainable payout ratio.
The dividend of IHG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.34%
EPS Next 2Y17.73%
EPS Next 3Y15.83%
124.25
-4.37 (-3.4%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.39%
Inst Owner Change0.69%
Ins Owners0.33%
Ins Owner ChangeN/A
Market Cap19.59B
Analysts52.5
Price Target118.16 (-4.9%)
Short Float %0.24%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
Yearly Dividend1.44
Dividend Growth(5Y)5.49%
DP39.34%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)3.14%
PT rev (3m)13.71%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.39%
EPS NY rev (3m)-3.54%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.94 | ||
| Fwd PE | 22.81 | ||
| P/S | 4.15 | ||
| P/FCF | 29.82 | ||
| P/OCF | 26.47 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.75 |
EPS(TTM)4.15
EY3.34%
EPS(NY)5.45
Fwd EY4.38%
FCF(TTM)4.17
FCFY3.35%
OCF(TTM)4.69
OCFY3.78%
SpS29.94
BVpS-13.98
TBVpS-20.77
PEG (NY)1.52
PEG (5Y)5.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.94% | ||
| ROE | N/A | ||
| ROCE | 40.44% | ||
| ROIC | 29.09% | ||
| ROICexc | 44.74% | ||
| ROICexgc | 135.94% | ||
| OM | 21.02% | ||
| PM (TTM) | 13.52% | ||
| GM | 29.32% | ||
| FCFM | 13.92% |
ROA(3y)10.04%
ROA(5y)6.83%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)19.76%
ROIC(5y)16.29%
ROICexc(3y)36.1%
ROICexc(5y)26.67%
ROICexgc(3y)159.51%
ROICexgc(5y)105.98%
ROCE(3y)27.78%
ROCE(5y)23.16%
ROICexcg growth 3Y245.88%
ROICexcg growth 5Y2.76%
ROICexc growth 3Y153.58%
ROICexc growth 5Y11.93%
OM growth 3Y68.41%
OM growth 5Y5.99%
PM growth 3YN/A
PM growth 5Y14.92%
GM growth 3Y13.51%
GM growth 5Y3.35%
F-Score5
Asset Turnover1.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.44 | ||
| Debt/EBITDA | 2.79 | ||
| Cap/Depr | 127.69% | ||
| Cap/Sales | 1.76% | ||
| Interest Coverage | 6.94 | ||
| Cash Conversion | 70.01% | ||
| Profit Quality | 102.98% | ||
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 2.74 |
F-Score5
WACC8.15%
ROIC/WACC3.57
Cap/Depr(3y)107.01%
Cap/Depr(5y)94.1%
Cap/Sales(3y)2.04%
Cap/Sales(5y)2.63%
Profit Quality(3y)157.85%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)15.99%
EPS 3Y128.96%
EPS 5Y5.41%
EPS Q2Q%11.48%
EPS Next Y19.68%
EPS Next 2Y17.73%
EPS Next 3Y15.83%
EPS Next 5Y13.18%
Revenue 1Y (TTM)9.16%
Revenue growth 3Y24.54%
Revenue growth 5Y1.29%
Sales Q2Q%7.47%
Revenue Next Year7.51%
Revenue Next 2Y7.1%
Revenue Next 3Y6.64%
Revenue Next 5Y6.99%
EBIT growth 1Y9.25%
EBIT growth 3Y109.73%
EBIT growth 5Y7.36%
EBIT Next Year18.68%
EBIT Next 3Y11.55%
EBIT Next 5Y11.23%
FCF growth 1Y15.47%
FCF growth 3Y136.9%
FCF growth 5Y8.04%
OCF growth 1Y15.99%
OCF growth 3Y86.8%
OCF growth 5Y4.72%