NYSE:SHO

Stock Analysis Report

Sunstone Hotel Investors

Executive Summary

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release has interests in 20 hotels comprised of 10,609 rooms.

Snowflake

Fundamentals

Average dividend payer and fair value.


Similar Companies

Share Price & News

How has Sunstone Hotel Investors's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

1.2%

SHO

2.4%

US REITs

0.9%

US Market


1 Year Return

-9.3%

SHO

15.7%

US REITs

16.8%

US Market

Return vs Industry: SHO underperformed the US REITs industry which returned 15.7% over the past year.

Return vs Market: SHO underperformed the US Market which returned 16.8% over the past year.


Shareholder returns

SHOIndustryMarket
7 Day1.2%2.4%0.9%
30 Day2.8%-2.0%4.5%
90 Day5.9%1.7%6.2%
1 Year-4.4%-9.3%20.6%15.7%19.4%16.8%
3 Year15.0%-0.07%40.0%22.5%47.5%38.0%
5 Year16.2%-12.1%57.1%24.4%62.0%44.1%

Price Volatility Vs. Market

How volatile is Sunstone Hotel Investors's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sunstone Hotel Investors undervalued compared to its fair value and its price relative to the market?

17.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SHO ($13.91) is trading below our estimate of fair value ($16.87)

Significantly Below Fair Value: SHO is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SHO is good value based on its PE Ratio (20.4x) compared to the REITs industry average (38.7x).

PE vs Market: SHO is poor value based on its PE Ratio (20.4x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: SHO's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SHO is good value based on its PB Ratio (1.3x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Sunstone Hotel Investors forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-27.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHO's earnings are forecast to decline over the next 3 years (-27.1% per year).

Earnings vs Market: SHO's earnings are forecast to decline over the next 3 years (-27.1% per year).

High Growth Earnings: SHO's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SHO's revenue is expected to decline over the next 3 years (-0.5% per year).

High Growth Revenue: SHO's revenue is forecast to decline over the next 3 years (-0.5% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SHO's Return on Equity is forecast to be low in 3 years time (3.5%).


Next Steps

Past Performance

How has Sunstone Hotel Investors performed over the past 5 years?

6.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SHO has large one-off items impacting its financial results.

Growing Profit Margin: SHO's current net profit margins (13.8%) are lower than last year (15.4%).


Past Earnings Growth Analysis

Earnings Trend: SHO's earnings have grown by 6.3% per year over the past 5 years.

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

Earnings vs Industry: SHO had negative earnings growth (-14%) over the past year, making it difficult to compare to the REITs industry average (8.7%).


Return on Equity

High ROE: SHO's Return on Equity (6.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sunstone Hotel Investors'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: SHO has a high level of physical assets or inventory.

Debt Coverage by Assets: SHO's debt is not covered by short term assets (assets are 0.9x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Sunstone Hotel Investors's current dividend yield, its reliability and sustainability?

4.96%

Current Dividend Yield


Dividend Yield vs Market

company5.0%marketbottom25%1.4%markettop25%3.7%industryaverage3.7%forecastin3Years4.7%

Current dividend yield vs market & industry

Notable Dividend: SHO's dividend (4.96%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: SHO's dividend (4.96%) is in the top 25% of dividend payers in the US market (3.68%)


Stability and Growth of Payments

Stable Dividend: SHO's dividend payments have been volatile in the past 10 years.

Growing Dividend: SHO's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (68.2%), SHO's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SHO's dividends in 3 years are forecast to be thoroughly covered by earnings (0.3% payout ratio).


Next Steps

Management

What is the CEO of Sunstone Hotel Investors's salary, the management and board of directors tenure and is there insider trading?

6.8yrs

Average management tenure


CEO

John Arabia (49yo)

4.8yrs

Tenure

US$5,145,849

Compensation

Mr. John V. Arabia, CPA serves as the Chief Executive Officer since January 17, 2015 and President since February 15, 2013 at Sunstone Hotel Investors, Inc. and has been its Executive Director since Februa ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD5.15M) is about average for companies of similar size in the US market ($USD5.10M).

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


Management Age and Tenure

6.8yrs

Average Tenure

49yo

Average Age

Experienced Management: SHO's management team is seasoned and experienced (6.8 years average tenure).


Board Age and Tenure

6.9yrs

Average Tenure

60.5yo

Average Age

Experienced Board: SHO's board of directors are considered experienced (6.9 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.


Ownership Breakdown

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


Management Team

  • John Arabia (49yo)

    President

    • Tenure: 4.8yrs
    • Compensation: US$5.15m
  • Bryan Giglia (43yo)

    Executive VP & CFO

    • Tenure: 6.8yrs
    • Compensation: US$2.33m
  • Marc Hoffman (61yo)

    Executive VP & COO

    • Tenure: 9.8yrs
    • Compensation: US$2.64m
  • Denise Hertle

    Vice President of Corporate Accounting

    • Tenure: 0yrs
  • Michael Harvey

    Vice President of Asset Management

    • Tenure: 9.7yrs
  • Robert Springer (41yo)

    Executive VP & Chief Investment Officer

    • Tenure: 6.8yrs
    • Compensation: US$2.10m
  • Cormac O’Modhrain

    Group Vice President of Asset Management

    • Tenure: 0yrs
  • Todd Hersperger

    Vice President of Asset Management

    • Tenure: 0yrs
  • David Klein (50yo)

    Executive VP

    • Tenure: 0yrs
    • Compensation: US$1.28m
  • Aaron Reyes

    VP of Corporate Finance & Treasurer

    • Tenure: 2yrs

Board Members

  • Keith Russell (74yo)

    Independent Director

    • Tenure: 15.1yrs
    • Compensation: US$193.26k
  • Tom Lewis (66yo)

    Independent Director

    • Tenure: 13.5yrs
    • Compensation: US$173.26k
  • Doug Pasquale (64yo)

    Non-Executive Chairman of the Board

    • Tenure: 4.5yrs
    • Compensation: US$305.21k
  • Andrew Batinovich (60yo)

    Independent Director

    • Tenure: 8yrs
    • Compensation: US$193.26k
  • W. Baird (58yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$173.26k
  • Z. Jamie Behar (61yo)

    Independent Director

    • Tenure: 15.1yrs
    • Compensation: US$193.26k
  • John Arabia (49yo)

    President

    • Tenure: 4.8yrs
    • Compensation: US$5.15m
  • Murray McCabe (51yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$173.26k

Company Information

Sunstone Hotel Investors, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sunstone Hotel Investors, Inc.
  • Ticker: SHO
  • Exchange: NYSE
  • Founded: 1995
  • Industry: Hotel and Resort REITs
  • Sector: Real Estate
  • Market Cap: US$3.128b
  • Shares outstanding: 224.86m
  • Website: https://www.sunstonehotels.com

Number of Employees


Location

  • Sunstone Hotel Investors, Inc.
  • 200 Spectrum Center Drive
  • 21st Floor
  • Irvine
  • California
  • 92618
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SHONYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2004
UF2DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2004

Biography

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release has interests in 20 hotels comprised of 10,609 rooms. Sunstone's business is to acquire ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/19 23:55
End of Day Share Price2019/11/19 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.