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SUNSTONE HOTEL INVESTORS INC (SHO) Stock Fundamental Analysis

NYSE:SHO - New York Stock Exchange, Inc. - US8678921011 - REIT

11.74  +0.02 (+0.17%)

After market: 11.74 0 (0%)

Fundamental Rating

3

Taking everything into account, SHO scores 3 out of 10 in our fundamental rating. SHO was compared to 129 industry peers in the Diversified REITs industry. SHO has an average financial health and profitability rating. SHO has a expensive valuation and it also scores bad on growth.


Dividend Valuation Growth Profitability Health

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4

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.
SHO had positive earnings in 4 of the past 5 years.
Of the past 5 years SHO 4 years had a positive operating cash flow.
SHO Yearly Net Income VS EBIT VS OCF VS FCFSHO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M -400M

1.2 Ratios

SHO's Return On Assets of 4.94% is amongst the best of the industry. SHO outperforms 92.06% of its industry peers.
The Return On Equity of SHO (7.25%) is better than 81.75% of its industry peers.
With a Return On Invested Capital value of 2.34%, SHO is not doing good in the industry: 61.90% of the companies in the same industry are doing better.
Industry RankSector 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
SHO Yearly ROA, ROE, ROICSHO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 -20

1.3 Margins

With a decent Profit Margin value of 16.92%, SHO is doing good in the industry, outperforming 70.63% 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.
In the last couple of years the Operating Margin of SHO has declined.
The Gross Margin of SHO (61.19%) is worse than 68.25% of its industry peers.
SHO's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
SHO Yearly Profit, Operating, Gross MarginsSHO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50 -50 -100 -150

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5

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SHO is destroying value.
The number of shares outstanding for SHO has been reduced compared to 1 year ago.
SHO has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, SHO has an improved debt to assets ratio.
SHO Yearly Shares OutstandingSHO Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M
SHO Yearly Total Debt VS Total AssetsSHO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

2.2 Solvency

Based on the Altman-Z score of 1.59, we must say that SHO is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.59, SHO belongs to the top of the industry, outperforming 91.27% 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.
SHO has a better Debt to Equity ratio (0.38) than 95.24% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.38
Debt/FCF N/A
Altman-Z 1.59
ROIC/WACC0.29
WACC8.11%
SHO Yearly LT Debt VS Equity VS FCFSHO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M 1B 1.5B 2B 2.5B

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.
The Current ratio of SHO (1.46) is better than 60.32% of its industry peers.
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 62.70% of its industry peers.
Industry RankSector Rank
Current Ratio 1.46
Quick Ratio 1.46
SHO Yearly Current Assets VS Current LiabilitesSHO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M

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2

3. Growth

3.1 Past

The earnings per share for SHO have decreased strongly by -60.00% in the last year.
SHO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -20.66% yearly.
The Revenue has decreased by -9.99% in the past year.
Measured over the past years, SHO shows a decrease in Revenue. The Revenue has been decreasing by -3.17% on average per year.
EPS 1Y (TTM)-60%
EPS 3YN/A
EPS 5Y-20.66%
EPS Q2Q%-100%
Revenue 1Y (TTM)-9.99%
Revenue growth 3Y54.42%
Revenue growth 5Y-3.17%
Sales Q2Q%-8.6%

3.2 Future

The Earnings Per Share is expected to decrease by -18.02% on average over the next years. This is quite bad
SHO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.88% yearly.
EPS Next Y-59.84%
EPS Next 2Y-14.65%
EPS Next 3Y-18.02%
EPS Next 5YN/A
Revenue Next Year-7.25%
Revenue Next 2Y0.68%
Revenue Next 3Y0.88%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
SHO Yearly Revenue VS EstimatesSHO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M 1B
SHO Yearly EPS VS EstimatesSHO Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 1 -1 -2

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1

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 73.38, which means the current valuation is very expensive for SHO.
Compared to the rest of the industry, the Price/Earnings ratio of SHO is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.29. SHO is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 48.84, SHO can be considered very expensive at the moment.
61.90% of the companies in the same industry are more expensive than SHO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, SHO is valued quite expensively.
Industry RankSector Rank
PE 73.38
Fwd PE 48.84
SHO Price Earnings VS Forward Price EarningsSHO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

SHO's Enterprise Value to EBITDA is on the same level as the industry average.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 14.62
SHO Per share dataSHO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6 8 10

4.3 Compensation for Growth

A cheap valuation may be justified as SHO's earnings are expected to decrease with -18.02% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-14.65%
EPS Next 3Y-18.02%

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3

5. Dividend

5.1 Amount

SHO has a Yearly Dividend Yield of 2.91%.
With a Dividend Yield of 2.91, SHO pays less dividend than the industry average, which is at 18.51. 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 2.28.
Industry RankSector Rank
Dividend Yield 2.91%

5.2 History

The dividend of SHO decreases each year by -18.03%.
SHO has paid a dividend for at least 10 years, which is 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
SHO Yearly Dividends per shareSHO Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2022 2023 2024 0.5 1

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-14.65%
EPS Next 3Y-18.02%
SHO Yearly Income VS Free CF VS DividendSHO Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M -400M
SHO Dividend Payout.SHO Dividend Payout, showing the Payout Ratio.SHO Dividend Payout.PayoutRetained Earnings

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SUNSTONE HOTEL INVESTORS INC

NYSE:SHO (1/21/2025, 8:26:33 PM)

After market: 11.74 0 (0%)

11.74

+0.02 (+0.17%)

Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)11-12 2024-11-12/bmo
Earnings (Next)N/A N/A
Inst Owners100.7%
Inst Owner Change-0.01%
Ins Owners1.08%
Ins Owner Change-1.95%
Market Cap2.36B
Analysts68.75
Price Target11.73 (-0.09%)
Short Float %5.22%
Short Ratio3.5
Dividend
Industry RankSector Rank
Dividend Yield 2.91%
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)76.24%
Min EPS beat(4)-100%
Max EPS beat(4)296.04%
EPS beat(8)7
Avg EPS beat(8)166.05%
EPS beat(12)10
Avg EPS beat(12)126.96%
EPS beat(16)13
Avg EPS beat(16)98.56%
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)2.43%
PT rev (3m)3.69%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-139.33%
EPS NY rev (1m)0%
EPS NY rev (3m)-46.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-10.4%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.9%
Valuation
Industry RankSector Rank
PE 73.38
Fwd PE 48.84
P/S 2.59
P/FCF N/A
P/OCF 13.93
P/B 1.11
P/tB 1.11
EV/EBITDA 14.62
EPS(TTM)0.16
EY1.36%
EPS(NY)0.24
Fwd EY2.05%
FCF(TTM)-0.3
FCFYN/A
OCF(TTM)0.84
OCFY7.18%
SpS4.53
BVpS10.58
TBVpS10.58
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector 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 RankSector 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 1.59
F-Score6
WACC8.11%
ROIC/WACC0.29
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)-60%
EPS 3YN/A
EPS 5Y-20.66%
EPS Q2Q%-100%
EPS Next Y-59.84%
EPS Next 2Y-14.65%
EPS Next 3Y-18.02%
EPS Next 5YN/A
Revenue 1Y (TTM)-9.99%
Revenue growth 3Y54.42%
Revenue growth 5Y-3.17%
Sales Q2Q%-8.6%
Revenue Next Year-7.25%
Revenue Next 2Y0.68%
Revenue Next 3Y0.88%
Revenue Next 5YN/A
EBIT growth 1Y-33.84%
EBIT growth 3YN/A
EBIT growth 5Y-8.33%
EBIT Next Year95.57%
EBIT Next 3Y32.93%
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%