NYSE:DRH

Stock Analysis Report

DiamondRock Hospitality

Executive Summary

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations.

Rewards

Trading at 43.2% below its fair value

Earnings are forecast to grow 3.49% per year

Pays a high and reliable dividend of 4.83%

Risk Analysis

No risks detected for DRH from our risk checks.


Snowflake Analysis

6 star dividend payer and good value.


Similar Companies

Share Price & News

How has DiamondRock Hospitality's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-6.6%

DRH

-0.08%

US REITs

-2.7%

US Market


1 Year Return

-1.7%

DRH

15.7%

US REITs

21.2%

US Market

Return vs Industry: DRH underperformed the US REITs industry which returned 17.9% over the past year.

Return vs Market: DRH underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

DRHIndustryMarket
7 Day-6.6%-0.08%-2.7%
30 Day-12.2%3.0%0.09%
90 Day-1.8%0.6%6.9%
1 Year3.1%-1.7%20.5%15.7%23.8%21.2%
3 Year0.2%-12.9%37.4%20.0%48.1%38.6%
5 Year-15.7%-33.3%48.3%17.7%72.5%53.4%

Price Volatility Vs. Market

How volatile is DiamondRock Hospitality's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is DiamondRock Hospitality undervalued compared to its fair value and its price relative to the market?

45.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DRH ($10.35) is trading below our estimate of fair value ($18.22)

Significantly Below Fair Value: DRH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DRH is good value based on its PE Ratio (28.8x) compared to the REITs industry average (37.8x).

PE vs Market: DRH is poor value based on its PE Ratio (28.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DRH is poor value based on its PEG Ratio (8.2x)


Price to Book Ratio

PB vs Industry: DRH is good value based on its PB Ratio (1.1x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is DiamondRock Hospitality forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

3.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DRH's forecast earnings growth (3.5% per year) is above the savings rate (1.7%).

Earnings vs Market: DRH's earnings (3.5% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: DRH's revenue (2.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: DRH's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DRH's Return on Equity is forecast to be low in 3 years time (4.5%).


Next Steps

Past Performance

How has DiamondRock Hospitality performed over the past 5 years?

-11.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DRH has high quality earnings.

Growing Profit Margin: DRH's current net profit margins (7.9%) are lower than last year (10.5%).


Past Earnings Growth Analysis

Earnings Trend: DRH's earnings have declined by -11.6% per year over the past 5 years.

Accelerating Growth: DRH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DRH had negative earnings growth (-17.2%) over the past year, making it difficult to compare to the REITs industry average (8.1%).


Return on Equity

High ROE: DRH's Return on Equity (4.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is DiamondRock Hospitality's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

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

Debt Coverage by Assets: DRH's debt is not covered by short term assets (assets are 0.2x debt).


Financial Institutions Analysis

Asset Level: DRH's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if DRH has a sufficient allowance for bad loans.

Low Risk Liabilities: DRH reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if DRH has an acceptable proportion of non-loan assets held.

Low Risk Deposits: DRH has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if DRH has an appropriate level of bad loans.


Next Steps

Dividend

What is DiamondRock Hospitality's current dividend yield, its reliability and sustainability?

5.09%

Current Dividend Yield


Dividend Yield vs Market

company5.1%marketbottom25%1.4%markettop25%3.7%industryaverage3.6%forecastin3Years5.1%

Current dividend yield vs market & industry

Notable Dividend: DRH's dividend (4.83%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: DRH's dividend (4.83%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54.6%), DRH's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DRH's dividends in 3 years are forecast to be thoroughly covered by earnings (0.2% payout ratio).


Next Steps

Management

What is the CEO of DiamondRock Hospitality's salary, the management and board of directors tenure and is there insider trading?

5.1yrs

Average management tenure


CEO

Mark Brugger (49yo)

11.3yrs

Tenure

US$5,100,461

Compensation

Mr. Mark W. Brugger has been the Chief Executive Officer at Diamondrock Hospitality Company since September 1, 2008 and has been its President since May 1, 2013. Mr. Brugger co-founded Diamondrock Hospital ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD5.10M) is above average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.1yrs

Average Tenure

50yo

Average Age

Experienced Management: DRH's management team is seasoned and experienced (5.1 years average tenure).


Board Age and Tenure

8.0yrs

Average Tenure

64.5yo

Average Age

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


Insider Trading

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


Recent Insider Transactions

SellUS$82,88008 Jul 19
Maureen McAvey
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares8,000
Max PriceUS$10.36

Ownership Breakdown

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


Management Team

  • Mark Brugger (49yo)

    President

    • Tenure: 11.3yrs
    • Compensation: US$5.10m
  • Troy Furbay (52yo)

    Executive VP & Chief Investment Officer

    • Tenure: 5.8yrs
    • Compensation: US$1.88m
  • Jeff Donnelly (48yo)

    Executive VP & CFO

    • Tenure: 0.4yrs
  • William Tennis (64yo)

    Executive VP

    • Tenure: 10yrs
    • Compensation: US$1.50m
  • Tom Healy (51yo)

    Executive VP of Asset Management & COO

    • Tenure: 3yrs
    • Compensation: US$1.66m
  • Briony Quinn (48yo)

    Senior VP & Treasurer

    • Tenure: 1.8yrs
  • Dustin Resnick

    Vice President of Acquisitions and Investments

    • Tenure: 5.1yrs
  • Sean Kensil

    Director of Financial Planning & Analysis


    Board Members

    • Bill Shaw (73yo)

      Independent Director

      • Tenure: 3.3yrs
      • Compensation: US$167.50k
    • Bruce Wardinski (59yo)

      Lead Director

      • Tenure: 3.7yrs
      • Compensation: US$202.50k
    • Gilbert Ray (75yo)

      Independent Director

      • Tenure: 15.5yrs
      • Compensation: US$187.50k
    • Bill McCarten (70yo)

      Independent Chairman of the Board

      • Tenure: 16yrs
      • Compensation: US$275.55k
    • Maureen McAvey (72yo)

      Independent Director

      • Tenure: 15.5yrs
      • Compensation: US$167.50k
    • Mark Brugger (49yo)

      President

      • Tenure: 11.3yrs
      • Compensation: US$5.10m
    • Tim Chi (42yo)

      Independent Director

      • Tenure: 4.6yrs
      • Compensation: US$167.50k
    • Kathleen Wayton (59yo)

      Independent Director

      • Tenure: 0.9yrs

    Company Information

    DiamondRock Hospitality Company's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: DiamondRock Hospitality Company
    • Ticker: DRH
    • Exchange: NYSE
    • Founded: 2004
    • Industry: Hotel and Resort REITs
    • Sector: Real Estate
    • Implied Market Cap: US$2.034b
    • Market Cap: US$1.966b
    • Shares outstanding: 200.99m
    • Website: https://www.drhc.com

    Number of Employees


    Location

    • DiamondRock Hospitality Company
    • 2 Bethesda Metro Center
    • Suite 1400
    • Bethesda
    • Maryland
    • 20814
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    HBODB (Deutsche Boerse AG)YesCommon SharesDEEURMay 2005
    DRHNYSE (New York Stock Exchange)YesCommon SharesUSUSDMay 2005

    Biography

    DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 31 premium quality hotels with over 10,000 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families as well as unique boutique hotels in the lifestyle segment. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/28 00:22
    End of Day Share Price2020/01/27 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.