SUNSTONE HOTEL INVESTORS INC (SHO) Stock Fundamental Analysis
NYSE:SHO - New York Stock Exchange, Inc. - US8678921011 - REIT - Currency: USD
Overall SHO gets a fundamental rating of 3 out of 10. We evaluated SHO against 130 industry peers in the Diversified REITs industry. SHO scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. SHO has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year SHO was profitable.
SHO had a positive operating cash flow in the past year.
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's Return On Assets of 0.64% is in line compared to the rest of the industry. SHO outperforms 50.77% of its industry peers.
SHO has a Return On Equity of 0.95%. This is comparable to the rest of the industry: SHO outperforms 46.15% of its industry peers.
SHO has a Return On Invested Capital of 2.09%. This is in the lower half of the industry: SHO underperforms 65.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHO is in line with the industry average of 3.16%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.64% | ||
| ROE | 0.95% | ||
| 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
SHO has a Profit Margin (2.14%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of SHO has declined.
The Operating Margin of SHO (8.43%) is worse than 82.31% of its industry peers.
SHO's Operating Margin has declined in the last couple of years.
The Gross Margin of SHO (60.93%) is worse than 66.92% of its industry peers.
SHO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.43% | ||
| PM (TTM) | 2.14% | ||
| GM | 60.93% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SHO is destroying value.
Compared to 1 year ago, SHO has less shares outstanding
SHO has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, SHO has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.17, we must say that SHO is in the distress zone and has some risk of bankruptcy.
SHO has a better Altman-Z score (1.17) than 81.54% of its industry peers.
SHO has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
SHO's Debt to Equity ratio of 0.41 is amongst the best of the industry. SHO outperforms 93.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.17 |
ROIC/WACC0.27
WACC7.71%
2.3 Liquidity
A Current Ratio of 1.27 indicates that SHO should not have too much problems paying its short term obligations.
SHO's Current ratio of 1.27 is fine compared to the rest of the industry. SHO outperforms 63.85% of its industry peers.
A Quick Ratio of 1.27 indicates that SHO should not have too much problems paying its short term obligations.
SHO has a better Quick ratio (1.27) than 64.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
SHO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -66.67%.
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 -3.90% in the last year.
The Revenue has been decreasing by -4.07% on average over the past years.
EPS 1Y (TTM)-66.67%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-80%
Revenue 1Y (TTM)-3.9%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%7.78%
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.
The Revenue is expected to grow by 4.03% on average over the next years.
EPS Next Y-1.4%
EPS Next 2Y19.21%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue Next Year6.97%
Revenue Next 2Y5.22%
Revenue Next 3Y4.03%
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
A Price/Earnings ratio of 88.90 indicates a quite expensive valuation of SHO.
SHO's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.30. SHO is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 44.68, which means the current valuation is very expensive for SHO.
The rest of the industry has a similar Price/Forward Earnings ratio as SHO.
The average S&P500 Price/Forward Earnings ratio is at 36.06. SHO is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.9 | ||
| Fwd PE | 44.68 |
4.2 Price Multiples
SHO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SHO is cheaper than 68.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.36 |
4.3 Compensation for Growth
A more expensive valuation may be justified as SHO's earnings are expected to grow with 24.89% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y19.21%
EPS Next 3Y24.89%
5. Dividend
5.1 Amount
SHO has a Yearly Dividend Yield of 3.89%. Purely for dividend investing, there may be better candidates out there.
SHO's Dividend Yield is slightly below the industry average, which is at 6.44.
Compared to an average S&P500 Dividend Yield of 2.34, SHO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.89% |
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 427.55% of its income as dividend. This is not a sustainable payout ratio.
DP427.55%
EPS Next 2Y19.21%
EPS Next 3Y24.89%
8.89
-0.02 (-0.22%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners102.02%
Inst Owner Change0%
Ins Owners1.21%
Ins Owner Change6.39%
Market Cap1.77B
Analysts72
Price Target10.05 (13.05%)
Short Float %7.25%
Short Ratio5.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.89% |
Yearly Dividend0.45
Dividend Growth(5Y)-9.74%
DP427.55%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)96.14%
Min EPS beat(2)28.25%
Max EPS beat(2)164.03%
EPS beat(4)3
Avg EPS beat(4)25.3%
Min EPS beat(4)-100%
Max EPS beat(4)164.03%
EPS beat(8)7
Avg EPS beat(8)358.09%
EPS beat(12)11
Avg EPS beat(12)329.11%
EPS beat(16)14
Avg EPS beat(16)252.57%
Revenue beat(2)1
Avg Revenue beat(2)-1.56%
Min Revenue beat(2)-3.82%
Max Revenue beat(2)0.7%
Revenue beat(4)1
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-3.82%
Max Revenue beat(4)0.7%
Revenue beat(8)4
Avg Revenue beat(8)-0.76%
Revenue beat(12)8
Avg Revenue beat(12)1.84%
Revenue beat(16)11
Avg Revenue beat(16)2.69%
PT rev (1m)0%
PT rev (3m)-12.62%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-33.9%
EPS NY rev (1m)29.55%
EPS NY rev (3m)-26.91%
Revenue NQ rev (1m)-0.39%
Revenue NQ rev (3m)-3.49%
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)-2.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.9 | ||
| Fwd PE | 44.68 | ||
| P/S | 1.92 | ||
| P/FCF | N/A | ||
| P/OCF | 10.78 | ||
| P/B | 0.85 | ||
| P/tB | 0.85 | ||
| EV/EBITDA | 12.36 |
EPS(TTM)0.1
EY1.12%
EPS(NY)0.2
Fwd EY2.24%
FCF(TTM)-0.33
FCFYN/A
OCF(TTM)0.82
OCFY9.27%
SpS4.64
BVpS10.45
TBVpS10.45
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.64% | ||
| ROE | 0.95% | ||
| ROCE | 2.65% | ||
| ROIC | 2.09% | ||
| ROICexc | 2.14% | ||
| ROICexgc | 2.14% | ||
| OM | 8.43% | ||
| PM (TTM) | 2.14% | ||
| GM | 60.93% | ||
| 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 Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.09 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 1.67 | ||
| Cash Conversion | 79.75% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 | ||
| Altman-Z | 1.17 |
F-Score4
WACC7.71%
ROIC/WACC0.27
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)-66.67%
EPS 3Y29.76%
EPS 5Y-23.38%
EPS Q2Q%-80%
EPS Next Y-1.4%
EPS Next 2Y19.21%
EPS Next 3Y24.89%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.9%
Revenue growth 3Y21.17%
Revenue growth 5Y-4.07%
Sales Q2Q%7.78%
Revenue Next Year6.97%
Revenue Next 2Y5.22%
Revenue Next 3Y4.03%
Revenue Next 5YN/A
EBIT growth 1Y-30%
EBIT growth 3YN/A
EBIT growth 5Y-13.48%
EBIT Next Year209.81%
EBIT Next 3Y51.43%
EBIT Next 5YN/A
FCF growth 1Y-668.76%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-32.68%
OCF growth 3Y81.77%
OCF growth 5Y-10.15%