NYSE:CHH

Stock Analysis Report

Choice Hotels International

Executive Summary

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide.


Snowflake Analysis

Average dividend payer with limited growth.


Similar Companies

Share Price & News

How has Choice Hotels International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-10.1%

CHH

-13.9%

US Hospitality

-7.6%

US Market


1 Year Return

20.1%

CHH

-7.9%

US Hospitality

10.2%

US Market

Return vs Industry: CHH exceeded the US Hospitality industry which returned -4.5% over the past year.

Return vs Market: CHH exceeded the US Market which returned 10.5% over the past year.


Shareholder returns

CHHIndustryMarket
7 Day-10.1%-13.9%-7.6%
30 Day-4.3%-11.3%-4.5%
90 Day-1.4%-9.8%-0.6%
1 Year21.3%20.1%-5.4%-7.9%12.5%10.2%
3 Year60.9%55.6%14.9%7.2%37.1%28.3%
5 Year62.0%51.8%26.0%12.5%60.8%43.2%

Price Volatility Vs. Market

How volatile is Choice Hotels International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Choice Hotels International undervalued compared to its fair value and its price relative to the market?

23.98x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CHH ($98.15) is trading above our estimate of fair value ($85.29)

Significantly Below Fair Value: CHH is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CHH is poor value based on its PE Ratio (24.5x) compared to the Hospitality industry average (21.5x).

PE vs Market: CHH is poor value based on its PE Ratio (24.5x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: CHH is poor value based on its PEG Ratio (5x)


Price to Book Ratio

PB vs Industry: CHH has negative assets, so we can't compare its PB Ratio to the US Hospitality industry average.


Next Steps

Future Growth

How is Choice Hotels International forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

4.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHH's forecast earnings growth (4.9% per year) is above the savings rate (1.7%).

Earnings vs Market: CHH's earnings (4.9% per year) are forecast to grow slower than the US market (13.2% per year).

High Growth Earnings: CHH's earnings are forecast to grow, but not significantly.

Revenue vs Market: CHH's revenue (4.6% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: CHH's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHH's Return on Equity is forecast to be very high in 3 years time (55.3%).


Next Steps

Past Performance

How has Choice Hotels International performed over the past 5 years?

14.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHH has a high level of non-cash earnings.

Growing Profit Margin: CHH's current net profit margins (20%) are lower than last year (20.7%).


Past Earnings Growth Analysis

Earnings Trend: CHH's earnings have grown by 14% per year over the past 5 years.

Accelerating Growth: CHH's earnings growth over the past year (3.6%) is below its 5-year average (14% per year).

Earnings vs Industry: CHH earnings growth over the past year (3.6%) exceeded the Hospitality industry -8.2%.


Return on Equity

High ROE: CHH's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Next Steps

Financial Health

How is Choice Hotels International's financial position?


Financial Position Analysis

Short Term Liabilities: CHH has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: CHH has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: CHH has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: CHH's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: CHH's debt is well covered by operating cash flow (32.2%).

Interest Coverage: CHH's interest payments on its debt are well covered by EBIT (9.1x coverage).


Balance Sheet

Inventory Level: CHH has a high level of physical assets or inventory.

Debt Coverage by Assets: CHH has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is Choice Hotels International's current dividend yield, its reliability and sustainability?

0.94%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CHH's dividend (0.92%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: CHH's dividend (0.92%) is low compared to the top 25% of dividend payers in the US market (3.9%).


Stability and Growth of Payments

Stable Dividend: CHH's dividends per share have been stable in the past 10 years.

Growing Dividend: CHH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.8%), CHH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CHH's dividends in 3 years are forecast to be well covered by earnings (18.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Pat Pacious (53yo)

2.4yrs

Tenure

US$5,756,856

Compensation

Mr. Patrick S. Pacious, also known as Pat, has been the Chief Executive Officer of Choice Hotels International Inc. since September 12, 2017 and as its President since May 24, 2016. Mr. Pacious served as t ...


CEO Compensation Analysis

Compensation vs Market: Pat's total compensation ($USD5.76M) is about average for companies of similar size in the US market ($USD6.41M).

Compensation vs Earnings: Pat's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Patrick Pacious
President2.4yrsUS$5.76m0.30% $15.8m
Dominic Dragisich
Chief Financial Officer2.9yrsUS$2.04m0.027% $1.4m
Simone Wu
Senior VP of External Affairs8yrsUS$1.42m0.054% $2.9m
Patrick Cimerola
Chief Human Resources Officer18.1yrsUS$1.22m0.035% $1.9m
David Pepper
Chief Development Officer15.1yrsUS$1.95m0.15% $8.1m
Scott Oaksmith
Senior VP of Finance & Chief Accounting Officer3.8yrsUS$717.34k0.052% $2.8m
Brian Kirkland
Chief Technology Officer2yrsno datano data
Chad Fletcher
Vice President of Global Sales2yrsno datano data
Robert McDowell
Chief Commercial Officer8.8yrsno data0.046% $2.4m
Sarah Searls
Chief Customer Officer0.3yrsno datano data

3.3yrs

Average Tenure

52yo

Average Age

Experienced Management: CHH's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Patrick Pacious
President2.4yrsUS$5.76m0.30% $15.8m
Stewart Bainum
Chairman of the Board22.3yrsno data6.48% $344.4m
John Tague
Independent Director8.1yrsUS$209.01k0.050% $2.6m
Barbara Alexander
Independent Director8yrsUS$235.02k0.046% $2.5m
William Jews
Independent Director13.9yrsUS$231.19k0.047% $2.5m
Ervin Shames
Lead Independent Director0yrsUS$265.00k0.081% $4.3m
Dave Douglas
Member of Regional Advisory Board0yrsno datano data
Lani Hopkins
Member of the Travel Advisory Board11.9yrsno datano data
Liza Landsman
Independent Director5.3yrsUS$220.35k0.019% $991.8k
Monte J. Koch
Independent Director5.9yrsUS$258.17k0.022% $1.2m

8.0yrs

Average Tenure

62yo

Average Age

Experienced Board: CHH's board of directors are considered experienced (8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Choice Hotels International, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Choice Hotels International, Inc.
  • Ticker: CHH
  • Exchange: NYSE
  • Founded: 1939
  • Industry: Hotels, Resorts and Cruise Lines
  • Sector: Consumer Services
  • Market Cap: US$5.312b
  • Shares outstanding: 55.39m
  • Website: https://www.choicehotels.com

Number of Employees


Location

  • Choice Hotels International, Inc.
  • 1 Choice Hotels Circle
  • Suite 400
  • Rockville
  • Maryland
  • 20850
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHHNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1997
CZHDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1997

Biography

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. It operates through Hotel Franchising and Corporate & Other segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, WoodSpring Suites, Cambria Hotels, V8 Hotel Köln @Motorworld, Quality Hotel Ostrava, Hotel Aquarius Venice, and Ascend Hotel Collection. It also develops and markets cloud-based technology products to the hotel industry. As of February 12, 2020, the company had approximately 7,000 hotels with 575,000 rooms in approximately 40 countries and territories. Choice Hotels International, Inc. has a strategic agreement with AM Resorts, LLC to improve its loyalty program. The company was founded in 1939 and is based in Rockville, Maryland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/27 00:46
End of Day Share Price2020/02/26 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.