WYNDHAM HOTELS & RESORTS INC (WH) Stock Fundamental Analysis
NYSE:WH - New York Stock Exchange, Inc. - US98311A1051 - Common Stock - Currency: USD
Overall WH gets a fundamental rating of 5 out of 10. We evaluated WH against 133 industry peers in the Hotels, Restaurants & Leisure industry. While WH has a great profitability rating, there are quite some concerns on its financial health. WH is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
WH had positive earnings in the past year.
WH had a positive operating cash flow in the past year.
Of the past 5 years WH 4 years were profitable.
In the past 5 years WH always reported a positive cash flow from operatings.
1.2 Ratios
WH has a better Return On Assets (7.86%) than 78.20% of its industry peers.
With an excellent Return On Equity value of 57.69%, WH belongs to the best of the industry, outperforming 95.49% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 11.31%, WH is in the better half of the industry, outperforming 75.94% of the companies in the same industry.
WH had an Average Return On Invested Capital over the past 3 years of 10.92%. This is below the industry average of 13.81%.
The last Return On Invested Capital (11.31%) for WH is above the 3 year average (10.92%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.86% | ||
| ROE | 57.69% | ||
| ROIC | 11.31% |
ROA(3y)7.54%
ROA(5y)5.1%
ROE(3y)40.03%
ROE(5y)25.76%
ROIC(3y)10.92%
ROIC(5y)9.06%
1.3 Margins
WH's Profit Margin of 23.52% is amongst the best of the industry. WH outperforms 96.99% of its industry peers.
In the last couple of years the Profit Margin of WH has grown nicely.
WH has a better Operating Margin (40.00%) than 99.25% of its industry peers.
WH's Operating Margin has improved in the last couple of years.
WH has a better Gross Margin (59.58%) than 72.93% of its industry peers.
In the last couple of years the Gross Margin of WH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 40% | ||
| PM (TTM) | 23.52% | ||
| GM | 59.58% |
OM growth 3Y10.88%
OM growth 5Y11.89%
PM growth 3Y9.6%
PM growth 5Y21.83%
GM growth 3Y6.26%
GM growth 5Y7.12%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WH is still creating some value.
The number of shares outstanding for WH has been reduced compared to 1 year ago.
WH has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, WH has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.12 indicates that WH is not a great score, but indicates only limited risk for bankruptcy at the moment.
WH's Altman-Z score of 2.12 is in line compared to the rest of the industry. WH outperforms 59.40% of its industry peers.
WH has a debt to FCF ratio of 11.19. This is a negative value and a sign of low solvency as WH would need 11.19 years to pay back of all of its debts.
With a Debt to FCF ratio value of 11.19, WH perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
WH has a Debt/Equity ratio of 4.29. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WH (4.29) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.19 | ||
| Altman-Z | 2.12 |
ROIC/WACC1.3
WACC8.7%
2.3 Liquidity
A Current Ratio of 0.96 indicates that WH may have some problems paying its short term obligations.
WH has a Current ratio of 0.96. This is comparable to the rest of the industry: WH outperforms 53.38% of its industry peers.
WH has a Quick Ratio of 0.96. This is a bad value and indicates that WH is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.96, WH perfoms like the industry average, outperforming 56.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.47% over the past year.
WH shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.83% yearly.
The Revenue has been growing slightly by 2.16% in the past year.
Measured over the past years, WH shows a decrease in Revenue. The Revenue has been decreasing by -7.27% on average per year.
EPS 1Y (TTM)12.47%
EPS 3Y11.16%
EPS 5Y5.83%
EPS Q2Q%10.26%
Revenue 1Y (TTM)2.16%
Revenue growth 3Y-3.46%
Revenue growth 5Y-7.27%
Sales Q2Q%3.95%
3.2 Future
Based on estimates for the next years, WH will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.22% on average per year.
The Revenue is expected to grow by 7.37% on average over the next years.
EPS Next Y11.66%
EPS Next 2Y12.55%
EPS Next 3Y13.2%
EPS Next 5Y14.22%
Revenue Next Year3.77%
Revenue Next 2Y5.15%
Revenue Next 3Y5.99%
Revenue Next 5Y7.37%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 20.59, the valuation of WH can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of WH indicates a somewhat cheap valuation: WH is cheaper than 72.93% of the companies listed in the same industry.
WH's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.47.
Based on the Price/Forward Earnings ratio of 16.55, the valuation of WH can be described as correct.
Based on the Price/Forward Earnings ratio, WH is valued a bit cheaper than the industry average as 72.18% of the companies are valued more expensively.
WH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.91.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 16.55 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WH.
63.91% of the companies in the same industry are more expensive than WH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31 | ||
| EV/EBITDA | 14.76 |
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 WH may justify a higher PE ratio.
A more expensive valuation may be justified as WH's earnings are expected to grow with 13.20% in the coming years.
PEG (NY)1.77
PEG (5Y)3.53
EPS Next 2Y12.55%
EPS Next 3Y13.2%
5. Dividend
5.1 Amount
WH has a Yearly Dividend Yield of 1.94%.
Compared to an average industry Dividend Yield of 3.53, WH pays a bit more dividend than its industry peers.
WH's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
5.2 History
The dividend of WH has a limited annual growth rate of 5.55%.
WH has been paying a dividend for over 5 years, so it has already some track record.
WH has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.55%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
36.83% of the earnings are spent on dividend by WH. This is a low number and sustainable payout ratio.
WH's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.83%
EPS Next 2Y12.55%
EPS Next 3Y13.2%
91
+1.66 (+1.86%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners96.26%
Inst Owner Change0%
Ins Owners2.23%
Ins Owner Change20.46%
Market Cap7.01B
Analysts86.67
Price Target106.07 (16.56%)
Short Float %4.12%
Short Ratio2.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
Yearly Dividend1.53
Dividend Growth(5Y)5.55%
DP36.83%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.2%
Min EPS beat(2)1.91%
Max EPS beat(2)2.49%
EPS beat(4)3
Avg EPS beat(4)2.11%
Min EPS beat(4)-2.03%
Max EPS beat(4)6.05%
EPS beat(8)5
Avg EPS beat(8)1.11%
EPS beat(12)9
Avg EPS beat(12)4.11%
EPS beat(16)13
Avg EPS beat(16)11.26%
Revenue beat(2)0
Avg Revenue beat(2)-3.7%
Min Revenue beat(2)-3.89%
Max Revenue beat(2)-3.51%
Revenue beat(4)0
Avg Revenue beat(4)-4.69%
Min Revenue beat(4)-7.52%
Max Revenue beat(4)-3.51%
Revenue beat(8)0
Avg Revenue beat(8)-3.95%
Revenue beat(12)3
Avg Revenue beat(12)-2.47%
Revenue beat(16)4
Avg Revenue beat(16)-2.07%
PT rev (1m)-1.52%
PT rev (3m)-11.17%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.67%
EPS NY rev (1m)0.02%
EPS NY rev (3m)-2.64%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.83%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 16.55 | ||
| P/S | 4.93 | ||
| P/FCF | 31 | ||
| P/OCF | 25.67 | ||
| P/B | 12.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.76 |
EPS(TTM)4.42
EY4.86%
EPS(NY)5.5
Fwd EY6.04%
FCF(TTM)2.94
FCFY3.23%
OCF(TTM)3.55
OCFY3.9%
SpS18.44
BVpS7.52
TBVpS-32.34
PEG (NY)1.77
PEG (5Y)3.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.86% | ||
| ROE | 57.69% | ||
| ROCE | 14.96% | ||
| ROIC | 11.31% | ||
| ROICexc | 11.45% | ||
| ROICexgc | 63.22% | ||
| OM | 40% | ||
| PM (TTM) | 23.52% | ||
| GM | 59.58% | ||
| FCFM | 15.92% |
ROA(3y)7.54%
ROA(5y)5.1%
ROE(3y)40.03%
ROE(5y)25.76%
ROIC(3y)10.92%
ROIC(5y)9.06%
ROICexc(3y)11.26%
ROICexc(5y)9.44%
ROICexgc(3y)87.36%
ROICexgc(5y)71.71%
ROCE(3y)14.45%
ROCE(5y)11.99%
ROICexcg growth 3Y1.88%
ROICexcg growth 5Y0.36%
ROICexc growth 3Y7.5%
ROICexc growth 5Y5.53%
OM growth 3Y10.88%
OM growth 5Y11.89%
PM growth 3Y9.6%
PM growth 5Y21.83%
GM growth 3Y6.26%
GM growth 5Y7.12%
F-Score6
Asset Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.19 | ||
| Debt/EBITDA | 3.92 | ||
| Cap/Depr | 71.21% | ||
| Cap/Sales | 3.31% | ||
| Interest Coverage | 4.34 | ||
| Cash Conversion | 43.06% | ||
| Profit Quality | 67.66% | ||
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 2.12 |
F-Score6
WACC8.7%
ROIC/WACC1.3
Cap/Depr(3y)56.12%
Cap/Depr(5y)48.19%
Cap/Sales(3y)2.91%
Cap/Sales(5y)2.73%
Profit Quality(3y)100.7%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.47%
EPS 3Y11.16%
EPS 5Y5.83%
EPS Q2Q%10.26%
EPS Next Y11.66%
EPS Next 2Y12.55%
EPS Next 3Y13.2%
EPS Next 5Y14.22%
Revenue 1Y (TTM)2.16%
Revenue growth 3Y-3.46%
Revenue growth 5Y-7.27%
Sales Q2Q%3.95%
Revenue Next Year3.77%
Revenue Next 2Y5.15%
Revenue Next 3Y5.99%
Revenue Next 5Y7.37%
EBIT growth 1Y12.25%
EBIT growth 3Y7.04%
EBIT growth 5Y3.76%
EBIT Next Year36.44%
EBIT Next 3Y16.57%
EBIT Next 5Y13.48%
FCF growth 1Y-29.15%
FCF growth 3Y-14.75%
FCF growth 5Y36.96%
OCF growth 1Y-23.53%
OCF growth 3Y-12.03%
OCF growth 5Y23.73%