SUNSTONE HOTEL INVESTORS INC (SHO) Stock Fundamental Analysis
NYSE:SHO - New York Stock Exchange, Inc. - US8678921011 - REIT - Currency: USD
Taking everything into account, SHO scores 4 out of 10 in our fundamental rating. SHO was compared to 130 industry peers in the Diversified REITs industry. The financial health of SHO is average, but there are quite some concerns on its profitability. SHO is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year SHO was profitable.
In the past year SHO had a positive cash flow from operations.
Of the past 5 years SHO 4 years were profitable.
Of the past 5 years SHO 4 years had a positive operating cash flow.
1.2 Ratios
SHO has a Return On Assets of 0.89%. This is comparable to the rest of the industry: SHO outperforms 54.62% of its industry peers.
SHO has a Return On Equity (1.32%) which is in line with its industry peers.
With a Return On Invested Capital value of 2.09%, SHO is not doing good in the industry: 64.62% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital for SHO is in line with the industry average of 3.19%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.89% | ||
| ROE | 1.32% | ||
| ROIC | 2.09% |
ROA(3y)3.11%
ROA(5y)-0.84%
ROE(3y)4.55%
ROE(5y)-1.22%
ROIC(3y)2.7%
ROIC(5y)N/A
1.3 Margins
With a Profit Margin value of 3.06%, SHO perfoms like the industry average, outperforming 47.69% of the companies in the same industry.
SHO's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 8.68%, SHO is not doing good in the industry: 78.46% of the companies in the same industry are doing better.
SHO's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 61.08%, SHO is not doing good in the industry: 65.38% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of SHO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.68% | ||
| PM (TTM) | 3.06% | ||
| GM | 61.08% |
OM growth 3YN/A
OM growth 5Y-9.81%
PM growth 3Y4.77%
PM growth 5Y-22.47%
GM growth 3Y-0.55%
GM growth 5Y-0.8%
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 less shares outstanding than it did 1 year ago.
The number of shares outstanding for SHO has been reduced compared to 5 years ago.
Compared to 1 year ago, SHO has a worse debt to assets ratio.
2.2 Solvency
SHO has an Altman-Z score of 1.14. This is a bad value and indicates that SHO is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of SHO (1.14) is better than 83.85% of its industry peers.
SHO has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SHO (0.40) is better than 94.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.14 |
ROIC/WACC0.28
WACC7.54%
2.3 Liquidity
SHO has a Current Ratio of 1.51. This is a normal value and indicates that SHO is financially healthy and should not expect problems in meeting its short term obligations.
SHO has a better Current ratio (1.51) than 66.15% of its industry peers.
A Quick Ratio of 1.51 indicates that SHO should not have too much problems paying its short term obligations.
SHO's Quick ratio of 1.51 is fine compared to the rest of the industry. SHO outperforms 66.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.51 |
3. Growth
3.1 Past
SHO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -57.58%.
SHO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -23.38% yearly.
Looking at the last year, SHO shows a decrease in Revenue. The Revenue has decreased by -8.17% in the last year.
Measured over the past years, SHO shows a decrease in Revenue. The Revenue has been decreasing by -4.07% on average per year.
EPS 1Y (TTM)-57.58%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-102.62%
Revenue 1Y (TTM)-8.17%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%-2.03%
3.2 Future
SHO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.89% yearly.
Based on estimates for the next years, SHO will show a small growth in Revenue. The Revenue will grow by 4.97% on average per year.
EPS Next Y86.27%
EPS Next 2Y53.17%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue Next Year10.17%
Revenue Next 2Y6.57%
Revenue Next 3Y4.97%
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.
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
SHO is valuated quite expensively with a Price/Earnings ratio of 58.57.
Compared to the rest of the industry, the Price/Earnings ratio of SHO is on the same level as its industry peers.
When comparing the Price/Earnings ratio of SHO to the average of the S&P500 Index (27.63), we can say SHO is valued expensively.
A Price/Forward Earnings ratio of 31.44 indicates a quite expensive valuation of SHO.
Based on the Price/Forward Earnings ratio, SHO is valued a bit cheaper than the industry average as 75.38% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.85, SHO is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.57 | ||
| Fwd PE | 31.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHO is valued a bit cheaper than the industry average as 67.69% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.78 |
4.3 Compensation for Growth
SHO's 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 SHO's earnings are expected to grow with 24.89% in the coming years.
PEG (NY)0.68
PEG (5Y)N/A
EPS Next 2Y53.17%
EPS Next 3Y24.89%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.37%, SHO is a good candidate for dividend investing.
The stock price of SHO dropped by -28.51% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 16.87, SHO is paying slightly less dividend.
SHO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.37% |
5.2 History
The dividend of SHO decreases each year by -9.74%.
SHO has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of SHO decreased in the last 3 years.
Dividend Growth(5Y)-9.74%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
SHO pays out 327.68% of its income as dividend. This is not a sustainable payout ratio.
DP327.68%
EPS Next 2Y53.17%
EPS Next 3Y24.89%
8.2
-0.04 (-0.49%)
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 Change0.02%
Ins Owners1.18%
Ins Owner Change4.77%
Market Cap1.65B
Analysts68.75
Price Target11.5 (40.24%)
Short Float %7.7%
Short Ratio6.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.37% |
Yearly Dividend0.45
Dividend Growth(5Y)-9.74%
DP327.68%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-35.87%
Min EPS beat(2)-100%
Max EPS beat(2)28.25%
EPS beat(4)3
Avg EPS beat(4)628.1%
Min EPS beat(4)-100%
Max EPS beat(4)2575.25%
EPS beat(8)7
Avg EPS beat(8)424.1%
EPS beat(12)11
Avg EPS beat(12)329.08%
EPS beat(16)14
Avg EPS beat(16)243.33%
Revenue beat(2)1
Avg Revenue beat(2)-0.96%
Min Revenue beat(2)-2.61%
Max Revenue beat(2)0.7%
Revenue beat(4)2
Avg Revenue beat(4)-0.89%
Min Revenue beat(4)-2.61%
Max Revenue beat(4)0.7%
Revenue beat(8)5
Avg Revenue beat(8)0.34%
Revenue beat(12)9
Avg Revenue beat(12)2.69%
Revenue beat(16)12
Avg Revenue beat(16)3.23%
PT rev (1m)-2.75%
PT rev (3m)-1.98%
EPS NQ rev (1m)217.65%
EPS NQ rev (3m)26.58%
EPS NY rev (1m)17.36%
EPS NY rev (3m)8.49%
Revenue NQ rev (1m)-1.42%
Revenue NQ rev (3m)-1.33%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)0.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.57 | ||
| Fwd PE | 31.44 | ||
| P/S | 1.82 | ||
| P/FCF | N/A | ||
| P/OCF | 9.68 | ||
| P/B | 0.78 | ||
| P/tB | 0.78 | ||
| EV/EBITDA | 11.78 |
EPS(TTM)0.14
EY1.71%
EPS(NY)0.26
Fwd EY3.18%
FCF(TTM)-0.29
FCFYN/A
OCF(TTM)0.85
OCFY10.33%
SpS4.5
BVpS10.46
TBVpS10.46
PEG (NY)0.68
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.89% | ||
| ROE | 1.32% | ||
| ROCE | 2.65% | ||
| ROIC | 2.09% | ||
| ROICexc | 2.17% | ||
| ROICexgc | 2.17% | ||
| OM | 8.68% | ||
| PM (TTM) | 3.06% | ||
| GM | 61.08% | ||
| FCFM | N/A |
ROA(3y)3.11%
ROA(5y)-0.84%
ROE(3y)4.55%
ROE(5y)-1.22%
ROIC(3y)2.7%
ROIC(5y)N/A
ROICexc(3y)2.94%
ROICexc(5y)N/A
ROICexgc(3y)2.94%
ROICexgc(5y)N/A
ROCE(3y)3.42%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-13.98%
ROICexc growth 3YN/A
ROICexc growth 5Y-13.98%
OM growth 3YN/A
OM growth 5Y-9.81%
PM growth 3Y4.77%
PM growth 5Y-22.47%
GM growth 3Y-0.55%
GM growth 5Y-0.8%
F-Score4
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.14 | ||
| Cap/Depr | 184.19% | ||
| Cap/Sales | 25.32% | ||
| Interest Coverage | 1.61 | ||
| Cash Conversion | 83.89% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.51 | ||
| Altman-Z | 1.14 |
F-Score4
WACC7.54%
ROIC/WACC0.28
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)-57.58%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-102.62%
EPS Next Y86.27%
EPS Next 2Y53.17%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue 1Y (TTM)-8.17%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%-2.03%
Revenue Next Year10.17%
Revenue Next 2Y6.57%
Revenue Next 3Y4.97%
Revenue Next 5YN/A
EBIT growth 1Y-33.78%
EBIT growth 3YN/A
EBIT growth 5Y-13.48%
EBIT Next Year221.31%
EBIT Next 3Y51.43%
EBIT Next 5YN/A
FCF growth 1Y-129.75%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-14.01%
OCF growth 3Y81.77%
OCF growth 5Y-10.15%