SUNSTONE HOTEL INVESTORS INC (SHO) Stock Fundamental Analysis
NYSE:SHO - New York Stock Exchange, Inc. - US8678921011 - REIT - Currency: USD
We assign a fundamental rating of 3 out of 10 to SHO. SHO was compared to 129 industry peers in the Diversified REITs industry. SHO has only an average score on both its financial health and profitability. SHO does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
In the past year SHO was profitable.
SHO had a positive operating cash flow in the past year.
In multiple years SHO reported negative net income over the last 5 years.
In multiple years SHO reported negative operating cash flow during the last 5 years.
1.2 Ratios
SHO's Return On Assets of 4.94% is amongst the best of the industry. SHO outperforms 92.86% of its industry peers.
SHO has a better Return On Equity (7.25%) than 82.54% of its industry peers.
With a Return On Invested Capital value of 2.34%, SHO is not doing good in the industry: 62.70% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.94% | ||
| ROE | 7.25% | ||
| ROIC | 2.34% |
ROA(3y)2.96%
ROA(5y)-0.4%
ROE(3y)4.32%
ROE(5y)-0.54%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 16.92%, SHO is doing good in the industry, outperforming 71.43% of the companies in the same industry.
In the last couple of years the Profit Margin of SHO has remained more or less at the same level.
The Operating Margin of SHO (9.64%) is worse than 82.54% of its industry peers.
SHO's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 61.19%, SHO is doing worse than 68.25% of the companies in the same industry.
SHO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.64% | ||
| PM (TTM) | 16.92% | ||
| GM | 61.19% |
OM growth 3YN/A
OM growth 5Y-5.33%
PM growth 3YN/A
PM growth 5Y-0.96%
GM growth 3Y11.34%
GM growth 5Y-0.56%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SHO is destroying value.
SHO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
SHO has an Altman-Z score of 1.46. This is a bad value and indicates that SHO is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.46, SHO belongs to the best of the industry, outperforming 89.68% of the companies in the same industry.
SHO has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SHO (0.38) is better than 95.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.46 |
ROIC/WACC0.3
WACC7.88%
2.3 Liquidity
SHO has a Current Ratio of 1.46. This is a normal value and indicates that SHO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.46, SHO is in the better half of the industry, outperforming 62.70% of the companies in the same industry.
A Quick Ratio of 1.46 indicates that SHO should not have too much problems paying its short term obligations.
SHO has a Quick ratio of 1.46. This is in the better half of the industry: SHO outperforms 65.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.46 | ||
| Quick Ratio | 1.46 |
3. Growth
3.1 Past
The earnings per share for SHO have decreased by -3.03% in the last year.
Measured over the past years, SHO shows a decrease in Earnings Per Share. The EPS has been decreasing by -9.60% on average per year.
EPS 1Y (TTM)-3.03%
EPS 3YN/A
EPS 5Y-9.6%
EPS Q2Q%N/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-2.03%
3.2 Future
SHO is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -8.98% yearly.
The Revenue is expected to grow by 6.52% on average over the next years.
EPS Next Y-30.56%
EPS Next 2Y-8.98%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year9.47%
Revenue Next 2Y6.52%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 33.28, SHO can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as SHO.
The average S&P500 Price/Earnings ratio is at 29.63. SHO is around the same levels.
Based on the Price/Forward Earnings ratio of 47.93, the valuation of SHO can be described as expensive.
Based on the Price/Forward Earnings ratio, SHO is valued a bit cheaper than the industry average as 63.49% of the companies are valued more expensively.
SHO's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.28 | ||
| Fwd PE | 47.93 |
4.2 Price Multiples
SHO's Enterprise Value to EBITDA ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.59 |
4.3 Compensation for Growth
A cheap valuation may be justified as SHO's earnings are expected to decrease with -8.98% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-8.98%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.01%, SHO has a reasonable but not impressive dividend return.
With a Dividend Yield of 3.01, SHO pays less dividend than the industry average, which is at 18.40. 80.95% of the companies listed in the same industry pay a better dividend than SHO!
SHO's Dividend Yield is a higher than the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.01% |
5.2 History
The dividend of SHO decreases each year by -18.03%.
SHO has been paying a dividend for at least 10 years, so it has a reliable track record.
SHO has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-18.03%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
SHO pays out 56.69% of its income as dividend. This is a bit on the high side, but may be sustainable.
The Dividend Rate of SHO has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP56.69%
EPS Next 2Y-8.98%
EPS Next 3YN/A
10.65
-0.65 (-5.75%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners101.38%
Inst Owner Change3.31%
Ins Owners1.18%
Ins Owner Change4.4%
Market Cap2.14B
Analysts55.79
Price Target11.92 (11.92%)
Short Float %6.57%
Short Ratio4.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.01% |
Yearly Dividend0.29
Dividend Growth(5Y)-18.03%
DP56.69%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-45.54%
Min EPS beat(2)-100%
Max EPS beat(2)8.91%
EPS beat(4)3
Avg EPS beat(4)646.04%
Min EPS beat(4)-100%
Max EPS beat(4)2575.25%
EPS beat(8)7
Avg EPS beat(8)450.95%
EPS beat(12)10
Avg EPS beat(12)316.89%
EPS beat(16)13
Avg EPS beat(16)241.01%
Revenue beat(2)0
Avg Revenue beat(2)-2.23%
Min Revenue beat(2)-2.61%
Max Revenue beat(2)-1.85%
Revenue beat(4)2
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-2.61%
Max Revenue beat(4)0.2%
Revenue beat(8)5
Avg Revenue beat(8)1.03%
Revenue beat(12)8
Avg Revenue beat(12)2.37%
Revenue beat(16)11
Avg Revenue beat(16)1.83%
PT rev (1m)1.58%
PT rev (3m)4.05%
EPS NQ rev (1m)-16.95%
EPS NQ rev (3m)29.82%
EPS NY rev (1m)-3.05%
EPS NY rev (3m)-41.52%
Revenue NQ rev (1m)-3.57%
Revenue NQ rev (3m)-4.16%
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)-2.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.28 | ||
| Fwd PE | 47.93 | ||
| P/S | 2.35 | ||
| P/FCF | N/A | ||
| P/OCF | 12.64 | ||
| P/B | 1.01 | ||
| P/tB | 1.01 | ||
| EV/EBITDA | 13.59 |
EPS(TTM)0.32
EY3%
EPS(NY)0.22
Fwd EY2.09%
FCF(TTM)-0.3
FCFYN/A
OCF(TTM)0.84
OCFY7.91%
SpS4.53
BVpS10.58
TBVpS10.58
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.94% | ||
| ROE | 7.25% | ||
| ROCE | 2.96% | ||
| ROIC | 2.34% | ||
| ROICexc | 2.44% | ||
| ROICexgc | 2.44% | ||
| OM | 9.64% | ||
| PM (TTM) | 16.92% | ||
| GM | 61.19% | ||
| FCFM | N/A |
ROA(3y)2.96%
ROA(5y)-0.4%
ROE(3y)4.32%
ROE(5y)-0.54%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-6%
ROICexc growth 3YN/A
ROICexc growth 5Y-6%
OM growth 3YN/A
OM growth 5Y-5.33%
PM growth 3YN/A
PM growth 5Y-0.96%
GM growth 3Y11.34%
GM growth 5Y-0.56%
F-Score6
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.9 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 1.75 | ||
| Cash Conversion | 81.07% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.46 | ||
| Quick Ratio | 1.46 | ||
| Altman-Z | 1.46 |
F-Score6
WACC7.88%
ROIC/WACC0.3
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-3.03%
EPS 3YN/A
EPS 5Y-9.6%
EPS Q2Q%N/A
EPS Next Y-30.56%
EPS Next 2Y-8.98%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-2.03%
Revenue Next Year9.47%
Revenue Next 2Y6.52%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-33.84%
EBIT growth 3YN/A
EBIT growth 5Y-8.33%
EBIT Next Year96.27%
EBIT Next 3Y33.28%
EBIT Next 5YN/A
FCF growth 1Y73.97%
FCF growth 3YN/A
FCF growth 5Y-6.11%
OCF growth 1Y-0.23%
OCF growth 3YN/A
OCF growth 5Y-8.28%